Picture the scene. A darkened theatre. An expectant hush. The stage empty but for the waiting red spot.

But you’re not a professional speaker. You’re not a household name, ready to entertain with tidbits from your new book.

You’re a GC. And it’s compliance training time.

For Nishat Ruiter, this scene is not a million miles from reality. General counsel of TED, an organisation that has reinvented the conference, packaging mind-expanding ideas into pithy, spreadable talks perfect for both live enjoyment and the internet age, she is tasked with delivering legal concepts to an organisation whose stock-in-trade is communication.

‘People here love ideas. They are insatiable, curious people. It really feels that people who are at TED are there because they really feel driven to be there. I walk to the kitchen to grab a cup of coffee and I’ll be so enlightened in two minutes by the person I bump into because we’re talking about an issue or an idea or a solution that they found, and that becomes super compelling,’ she explains.

The compliance training bar is set unusually high, but rather than be daunted, Ruiter is inspired by the challenge.

‘The people at TED are working toward bringing ideas to as wide and as broad an audience as possible, but also focusing on the quality of the ideas. So then how does compliance match that? What do I do?’

She adds: ‘I would love for them… after hearing the calibre of speakers that are typically on stage at TED, including Bono, Sir Ken Robinson, Mellody Hobson and others, to hear something worth remembering and I realise the legal concepts should also represent great ideas – where possible’.

Any GC worth their salt has their finger on the regulatory pulse to spot compliance topics that will resonate with the legal and other issues facing their organisation. But the question of delivery takes something more than legal knowhow.

Ruiter created a bespoke compliance approach for TED staff, capitalising on the organisation’s open and collaborative culture to deliver a bold, fresh, and evolving suite of training events, based around three words: relevant, compelling and empowering.

Relevant

‘If you have a picture of compliance as a living, breathing, dynamic culture, you’re learning with your organisation, you’re in constant contact with your client, and you’re learning about how to best bring relevant information to them,’ says Ruiter.

‘I also value non-legal input to frame my compliance examples. Since I view things through a legal lens, it’s helpful to hear from non-legal colleagues how to use examples based on their day to day versus my own. This helps me fit into their frame of reference so when compliance examples are brought up, I tie it to real-life scenarios that they deal with every day to ensure it fits and sounds relevant to what they go through.’

For Ruiter, it is important to customise the presentation to the audience, leveraging the trademark TED informal style of presentation and using examples drawn from a similar industry sector, so that the message lands. And that message should be a positive, practical one.

‘I don’t agree with the compliance training style of: “You cannot, you shall not”. I don’t believe that that’s as meaningful as: this is why we have to do this. This is why it’s important that we don’t fall into these traps. Here are ways to help you. Here are tools to remember. Here are some implications and cases that have arisen because someone didn’t learn how to do this. Here are examples of what you can look out for.’

But she is particularly careful to go easy on the level of detail.

‘If you ever look at a TED talk, the slides are typically used to amplify the idea that is being shared by the speaker. In legal presentations, the slides can comprise “all” of the ideas and typically fill up the frame, it’s designed with small font, and contains so much detail it is easy to lose the audience. Instead, I like to use animation and the use of simple graphics to illustrate brief points that summarise the lessons learned, hitting home with examples that are brief and to the point.’

Compelling

In Ruiter’s approach to compliance, the devil is not in the detail, but in finding a compelling format that can hold the crowd long enough to absorb the necessary points. This has led her to experiment with novel ways of delivering content.

‘To communicate an example of harassment, I created an audio podcast exercise, recording a couple of volunteers from TED in our studios. The idea was: what if two people were socialising after work, there was an interesting after-party, something happened, someone did something to someone. Rather than describing the scenario, we play the actual role-play in the podcast. We take the victim’s perspective first. Then I give them the opposite scenario. What’s the other person’s perspective? Because in every investigation that I’ve done in many years of doing compliance, there’s always two sides to the story. They hear the situation. We pause. I ask them what they thought,’ she explains.

‘I made this very personalised. I only had up to 25 people in the room. We served doughnuts. We allowed for questions. We made it intimate and we allowed for this in-person training because that is what I know will impact them. They are so creative that I needed to hold their attention with something that’s authentic and real.’

On another occasion, she ordered custom-made cookies to get the message across.

‘When I first got to TED, we updated the privacy policy and needed to explain the use of cookies and consent. So, at the staff retreat, we ordered specially baked cookies that had the word “Privacy” written across them (in red of course). On stage, I had about five minutes to present the concept and explain privacy, consent and why we updated our policy. So to demonstrate, before I passed out the cookies, we made sure everyone had to “accept” them first. It made a “tasty” impression and, while I don’t know for sure, my sense is that everyone walked away understanding cookies and consent in a way they never expected,’ she recalls.

Empowering

‘One of the biggest opportunities I believe lawyers have is to move away from the “us” and “them” concept, especially for in-house counsel. Using phrases like “They would never get it” or “They don’t care about legal” or acting as if legal is better than their clients misses a great opportunity of learning for everyone,’ says Ruiter.

‘Unless you make it a “we” situation, I don’t think they’re ever going to really take you seriously and I think that it’s not going to be as compelling and as effective as if you make it an “us”. We’re all here together. We all work for the same company.’

TED has an anonymous reporting system to address internal code of conduct issues, which staff are encouraged to use. The reporting system allows for a more transparent process where anyone can raise topics of concern without fear of retaliation, a protection that Ruiter believes is very important to retain when dealing with compliance.

‘Another way to address empowerment is to ask them to help with spotting red flags. This is a concept that seems obvious but can be lost when planning training in the field. In some ways, I feel like I have 250 staff members that play part of a legal role in their day to day, because they are looking and noticing issues before they arise and that helps me address them proactively. Training should be geared to tap into their sense of what is right and how to spot a “red flag” so they can get used to identifying concerns before they become a problem. Using case studies and examples, we explore together during the training questions such as: What could they have done? Why did the person choose the wrong direction? How could they have prevented the issue from happening? When you ask questions like this, and promote an open and honest discussion, there is a different level of involvement and engagement. Honestly, it reminds me of the challenges of being a parent. You can always tell your child “not” to do something, but in my experience it is more effective to show them why it is important, present an example that is compelling and help empower them to make the right decision.’

After internal training events, Ruiter sends out a survey of open questions to uncover what resonated and what didn’t among attendees, which can then form the basis for future improvement.

She explains: ‘I wanted to be transparent. We’re always learning and it’s important to always get better. Survey questions have been: What parts did you think were interesting? Was there a part that you really enjoyed? Was there any area that was confusing? Do you have any questions? Is there anything you’d like to learn more about? Is there something that bothers you? Why or why not?’

Fundamentally, Ruiter believes it is important to employ tools that empower non-legal colleagues to take ownership of the compliance training process, rather than passively complete off-the-shelf packages that, no matter how ‘interesting’, fail to strike a chord because they are too generic to speak the language of the organisation.

‘Assume that the people in the room can actually help – if you could ask them to help do something, what is it that you’d want them to do? Then frame the compliance training around that to give them real practical tools, and go back and be your advocate. That really reframes everything. It takes away from the us-them dynamic, it hopefully will make the presentation interesting and it will hopefully make it relevant, because you’re asking them to do something and be part of the process with you. I find that when you bring everyone on board and you share the same vision, a lot of amazing things can happen.’

On the road

TED compliance has an outreach element, as the organisation also retains a code of conduct for attendees at its annual conferences. TED conferences have always been organised to present ideas to attendees in an atmosphere of respect, professionalism and open curiosity to share ideas. However, at times, individuals that attend could lose sight of this important aspect of TED, and thus the code of conduct and reporting system is set up for all attendees, vendors and staff at the conference.

‘They have always been organised with the intent of maintaining an atmosphere of open curiosity, and you can’t do that if people are trying to oversell their stuff, or bothering you because they want to take a selfie because you’re famous, or harassing you, or discriminating against you and treating you wrongfully,’ says Ruiter.

‘The way we address our code of conduct at our conference is three fold: we publish our code of conduct in our programme, we have provided an anonymous reporting mechanism to allow for reporting in a safe environment, and we provide assistance with trained advocates to help attendees, if needed, in filling out the form or addressing their concerns. We created this system to help prevent issues and address them head on if and when they occur at the conference. By doing so, it adds a level of transparency and meaning behind our code of conduct that is of fundamental importance.’

Ruiter has trained a team of TED employees who act as advocates and assist attendees, if needed, as issues arise. If an investigation arises, then TED addresses each violation on site, either resulting in a warning, loss of badge privileges from a session or event, or it could result in sending the attendee home without a refund.

‘If we don’t know about the issue then things can fester and make the experience unfortunate or uncomfortable. When you’re in an employee organisation, you have managers and you have peers and you have colleagues, and you’re hopefully in a very friendly area where you will feel comfortable and you have resources like HR and legal to help you. When you’re an attendee, while you are not at a place of work, we still wanted to provide a resource that is simple and accessible for everyone.’

‘We have a process that shows to our employees the level of care and meaning behind the words that we give, and by having a dynamic level of code of conduct for conferences, it also reflects that we care deeply about the experiences even at our external events – and we’re there to help.’

Into the future

Right now, Ruiter is at the stage of refreshing her code of conduct training to reflect this year’s legislative and regulatory changes, and is developing new ideas to keep it fresh. In addition, TED has worked with an illustrator-designer to create a simple, brightly coloured employee handbook that matches the tone of the training.

Above all, she believes, what you do must be steeped in the culture of the organisation – which means that, ideally, you should be too.

‘Try to be authentic with your clients, and learn about what is relevant to them. By doing so, it changes perspectives from “them” to “we”, and from “I” to “us”… setting a better standard and approach that ultimately is more effective overall and can hopefully drive better impact.’

Photographs by Dian Lofton/TED

Latin America can be notoriously challenging for business. Volatile politics and economics teamed with concerning corruption levels in some areas, alongside a more stable picture in others, conspire to create a complex and nuanced regional environment – which keeps those in the role of regional counsel on their toes.

Ines Bahachille, associate general counsel for Latin America at US IT company Ingram Micro, put a Sinatra-flavoured twist on her feelings about the region’s difficulties: ‘If I can make it in Latin America, I’ll make it anywhere!’

But the flipside is that having responsibility for markets as diverse as Mexico, Brazil, the South Cone, the infamous Venezuela, and others, can craft a unique set of skills for those tasked with legal responsibility at global organisations.

‘It makes you able to manage the element of surprise easily, to resolve complex situations with fast decision-making without panicking, and to see things in the proper context without the need to cause unnecessary alarm. It makes one lead by example, to inspire others to operate in a culture of integrity and to also demonstrate that local operations can actually influence the country positively,’ Bahachille explains.

‘It is important to vigilantly develop as deep a familiarity as possible with the legal frameworks and key local laws affecting the industry, but it is even more important to know what you don’t know, to have the judgement to know when it is necessary to call upon trusted local counsel and to be prepared to make adjustments to accommodate local differences when needed,’ adds Casey Furman, legal director, Latin America and Caribbean at Verifone.

Regional counsel have the opportunity to add value to the business in unique and highly visible ways, be that applying a creative approach to investments that a global company can make in local markets, or lobbying to positively impact the footprint of the industry more broadly.

‘Governments change, laws change and obviously we have to be very proactive and understand the impact that these changes may have on the business side. Our industry is evolving constantly in technology and we look to work through associations to lobby and educate both the regulators and the governments, as well as to understand the industry while at the same time ensuring that these regulations don’t have a negative impact on the business side,’ says Larissa Zagustin, general counsel for International Media Networks Americas at Viacom.

‘We’ve had many cases where there have been regulatory changes that have helped increase revenues, so the business teams have felt a direct impact from our efforts because it’s basically allowing what used to be more restrictive to be more flexible, where the business teams can now generate more revenues.’

Latin America has opportunities for growth that lend it enduring appeal for investors looking to scale in the region, meaning that global corporates continue to play an important role, despite operational challenges in some jurisdictions.

Viacom has been busy creating new business lines and building strategic partnerships, expanding both in scale and reach. An example is the launch of Miami-based Viacom International Studio, illustrating Viacom’s ambitions to grow its content creation across the region, producing content for its own platforms, as well as for third parties like Netflix and Amazon. The company also has a joint venture in Brazil, and acquired Argentinian television station Telefe in 2016.

‘The formats generated in Brazil and Argentina have amazing potential outside of those specific countries, so we’ve been looking to grow, take that intellectual property and expand it. Viacom International Studio is looking how to tweak these formats and export them around the world. So it starts locally, but the formats have been successful enough that we’ve been able to take them to other parts of the world where they create their own version,’ says Zagustin.

‘We’re not just getting a pipeline of content from Viacom centrally, we’re creating our own content within the regions within our division. We are also establishing great strategic partnerships with third parties and that’s where it has been a great opportunity for my whole team to engage in business strategies that are not the typical way of producing content.’

As in other regions, being a flexible and creative business partner is the universal key to demonstrating value to the business – while, of course, keeping a firm steer on the ethical and compliance elements.

‘New issues, some foreseeable and others not, arise regularly, and solving them takes forthright communication and collaboration with the executive team. Getting to that place of communicating effectively and solving problems collaboratively is about gaining trust. It is also crucial to have a strong commercial acumen. As legal counsellors, we need to keep in mind that we are here to be solutions-oriented and to make business goals happen. When executives know that you have that mindset, it makes collaboration and communication much easier,’ says Furman.

But having that unique dual vantage point of both a legal and business lens can be especially useful in Latin America.

‘We have to recognise that some situations are non-typical or “non-common sense” sometimes, and that is when the set of skills of a counsel in charge of this region becomes very relevant,’ says Bahachille.

‘Once you gain the trust of the business, it is important not to overthink and just be truthful and authentic about the challenges and potential solutions. The key is to always keep in mind that we work for a company and not for specific individuals.’

Like elsewhere, the progression of in-house counsel to a position of business partner in Latin America has been most pronounced over the past decade.

‘Nowadays the general counsel is sitting at the table with the business and engaged and involved from the start of any type of strategic goals for the company. I would definitely think that the evolution in the past 10 years has gone in the direction where my team and myself have been high contributors to the business side. And when you’re engaging outside counsel in the region, they’ve also gone in a direction of still acting as lawyers but being also more business-friendly,’ explains Zagustin.

With both Bahachille, Zagustin and Furman all based not in Latin America itself, but in Miami, the question arises whether having legal leadership on the ground is necessary. But Bahachille, dual-licensed in New York and Venezuela, and responsible for a 13-strong team of people based in the US, Brazil, Mexico, Peru, Colombia, Argentina and other Latin American countries, thinks not:

‘We are a global world and technology allows everyone to see what happens around it. I report directly to the global general counsel, and at the same time I am very close to the senior business leaders on different levels. Encouraging regional initiatives is always positive – trying to leverage learnings across markets and influencing the team to work together as one,’ she explains.

Furman agrees that technology is a boon: ‘We use systems to track the status and progress of projects, manage litigation and oversee external counsel spend. We are also implementing a new contract management system that will help us to better collaborate among our legal team situated across the globe and to service our business users.’

Among the most pivotal roles that a regional counsel can play is that of applying specialist local knowledge and judgement to connecting the dots between the region and the global business.

Says Bahachille: ‘The beauty of being an in-house counsel is that we see the whole picture – and if we are not in that place, we have to learn how to do it. Being a regional counsel is a complex and yet a fun role, as long as we enjoy what we do and we are not afraid of standing up for what is right and trying to grow the business at the same time.’

The reputation of the legal profession is one of long hours and high pressure. This is true for both private practice and in-house lawyers, but the former is relatively well-catered to thanks to the defined corporate structures of private law firms and large support bases within such organisations. The latter, on the other hand, are often islands within their businesses with few other nearby lawyers to whom they can go for guidance and support.

Enter MOSAIC. An acronym for Mentoring Opportunities Shared Amongst In-House Counsel, the organisation was founded in 2015 in London and seeks to pair in-house counsel with suitable mentors from the profession. By 2017, MOSAIC had exceeded 100 mentoring pairs, and launched in the United States in December 2018.

‘Having been in-house lawyers ourselves for a number of years, we understood the benefits and the challenges that working in-house could bring,’ explain Claire Debney and Emma Sharpe, co-founders of MOSAIC. ‘MOSAIC was borne out of an expressed desire by in-house lawyers generally to have access to advice and gain other perspectives from those in-house.’

‘There are all sorts of opportunities for people in the legal profession and it’s really exciting to see all the different groups out there – be they legal tech, legal ops, disruptive innovation, women in the law and so on – but it feels like the in-house community has been left to co-ordinate itself and each group seems to operate in a silo. We need to do better at coming together as one community, recognising and building on the strengths that each group brings. We hope this is where MOSAIC can make a difference.’

The core of the programme is a bespoke technology platform, and is used by the mentors and mentees in all stages of the process. Mentors and mentees signing up for the programme are asked to complete a questionnaire. A bespoke algorithm suggests potential mentors, which the mentee can then make a mentoring request to any one of the suggested mentors. The platform also manages the practicalities of the mentoring relationship: scheduling meetings, setting goals and general communication.

‘Matching also very much depends on the mentee’s mentoring goals. Our standard connection plan is for 12 months and reflects the membership fee. Mentoring can be long-term, short-term, project-based, and mentoring can take place on a peer-to-peer basis. The frequency of meetings, location and structure of the mentoring should be agreed by the mentoring pair.’

Jamie Pearson, VP and head counsel for the Asia Pacific and Japan regions at Takeda, is currently registered as a mentor within the programme.

‘If it’s a good mentoring relationship, the support offered has the potential to make a material difference to people’s confidence and happiness at work,’ explains Pearson. ‘To break the idea of support down a little, I aspire to provide my mentees with a safe space in which to speak honestly about their work and their career, and hopefully useful advice that moves them in the direction that they want to go.’

‘I think a good mentoring relationship can be incredibly valuable from the mentee’s perspective,’ says Chris Sherwin, senior counsel at AstraZeneca and a registered mentee. ‘Most of us can get by fine without a mentor of course, but if you want to do more than just get by and you want to really excel, then having a mentor of some kind is essential. A good mentor helps us to identify the best in ourselves and to find ways to develop.’

The relationship between mentor and mentee has been envisioned as a two-way street: the mentees see the benefits of having the ear and advice of a more experienced lawyer, but the benefits extend to mentors and the wider profession, as well.

‘There can be a huge amount of value in talking something through with someone unconnected with your work, but who understands the job, the struggle, the desire to reach one’s full potential, the challenges, and ultimately the end goal, which is probably that we all want to be happy and satisfied with our work,’ says Pearson.

‘What I hadn’t expected is how doing the mentoring has become important to me. I really don’t do anything difficult in this role: I listen properly, I sympathise, I try to give advice that helps, thinking of situations that I’ve been in that were similar, and I ask questions.’

‘Essentially, all lawyers want to be thought of as useful. This role makes me feel useful in a work sense, outside the immediate sphere of my employer’s needs, and that feels really great. I would thoroughly recommend becoming a mentor.’

‘These programmes help shape a diverse profession and take some angst out of navigating the career path,’ adds Nilema Bhakta-Jones, another of MOSAIC’s registered mentors and CEO of Alacrity Law. ‘It helps us to pay it forward and show compassion, kindness and that the profession is full of people willing to help others. The Legal profession can be brutal and the competition fierce; sometimes the human being can be chewed up and lost in the process. I want to see more good people, and women in particular, from diverse backgrounds succeed. I learn a lot from my mentees and I experience joy in helping others.’

Mentors and mentees can become a member of MOSAIC by visiting www.mosaicforlawyers.com

Over the past year, I have been drawn back to a poem that I first heard when I was very young, namely that of Leisure, by the Welsh poet W.H. Davies. A short piece, it ends with:

A poor life this if, full of care, We have no time to stand and stare.

Taking a step back from the frantic, full-on day-to-day demands of the legal industry is incredibly hard to do. But it can be the most rewarding, and fulfilling. Since I started to try and put this into practice, I have thought about the people I have met in the industry and tried to discover whether they have the same philosophy or if they are totally engrossed in the business of law. Some of the latter individuals are fascinating, passionately engaged in the subject, clearly dedicated to what they do. But I find the conversations often colder, and harder to maintain. They are not as interesting, simply because they often lack that fundamental skill – emotional intelligence.

Having empathy with your clients and your colleagues, trying to understand what makes them tick (and what doesn’t), has always been important, but it is too often forgotten. But it is what brings the best out of people, and is also one of the fundamental drivers of good leadership. The key to this is something that lawyers are, in my experience, often not so good at. As I say to my six-year-old constantly: you were born with two ears and one mouth for a reason – you need to listen twice as much as you speak.

This brings me back to my first point, taking time to ‘stand and stare’ and, in particular, understanding the value of sitting back and hearing someone else speak. I have tried to attend more conferences and events in the past 12 months, to try and soak up what is being said, and to exchange views with others in the industry. And before I get into this, I have seen a growing trend towards dismissing conferences, especially ones that are involved in tech and the dreaded i-word, as not ‘breaking out of the echo chamber’. There is some truth to this – it can be slightly deflating to turn up and hear the same legal luminaries preaching to the converted for the umpteenth time.

But dig a little deeper and there is tremendous value to be gained from these events. And yes, I know it is hard to take time out from the constant workload, but the working life of GCs can be massively enhanced by stepping away from the office and engaging with the wider community. You have to make time, and sometimes you have to invest, but the benefits are there for all to take.

I was invited to Legalweek at the end of January in New York, which discussed the business of law, diversity and inclusion, information and data. My approach to the event was simple: I listened and I engaged. When I arrived at each session, I put down the phone, didn’t check my emails when the speakers and panel discussions were taking place, and wrote copious notes. But I also put my head up and looked around the room – who was in each session, did I know them, could I see what organisation they were from.

At the end of each session, I spoke to the panel speakers and to others in the audience. Some I knew very well, some I knew only slightly and some I had never met. As a result, I had conversations about subjects I would not normally have encountered, made new connections, and some of those conversations are now following up into potential collaborations.

In short, at a time when most of the legal industry is obsessed with the aforementioned tech and i-word, blockchain, machine learning and the like – I went back to basics. I went back to human. A word kept cropping up time and time again in the sessions: trust. Trust is at the heart of all of our interactions in the legal industry, and trust is built on relationships. And relationships, as everyone knows, have to be worked at or they die. So, you need to invest in those relationships to get the best out of them, and to keep them going, even if there is no immediate outcome or need.

But here’s the thing: out of all that investment in listening to the panellists, talking to the other delegates and speakers, and engaging with the content, I gained something else. I learned something. In fact, not just one thing, but an absolute stack of ideas – new ways of working and a host of practical ways to make changes. From the theoretical to the here and now, the conference gave me a new insight into a range of potential solutions in the industry. All of us are magpies, stealing the best ideas here and there to shape into our own way of working. By taking some time out of the office, these events can help shape your thinking.

The things that I would be thinking about as a GC from that event are:

• How does ‘VUCA’ affect the efficiency of my team?
• Can I use the techniques I heard about to reduce the legal cost of my M&A transaction to a tenth of the price?
• How can understanding the ‘4Ps’ marketing concept change how I interact with outside counsel?
• Why are ALSPs are no longer ‘A’?
• How do I insist my outside counsel budgets my legal work appropriately and, subsequently, how to reward/penalise?
• How does Prudential’s ‘Spotlight’ programme actively track diversity in its law firms?
• How can I use origination credits to my advantage?
• What communication skills are needed with the C-suite to ensure they see legal spend is optimised?
• I have the data I need to improve my legal department – so how do I extract it for analysis?
• I don’t want ‘more for less’, I want ‘better for less’. But how?

I can tell you, the answers (or at least the right questions to ask at the start) were all there. The downside is that not enough GCs are there to hear it. True, there are some bad events out there, but look around and you will find huge value in attending the right conferences/seminars/workshops. Many will probably say they can’t afford the time to do it – after all, ‘time is money’ according to Benjamin Franklin. But looking at the above questions, realistically, can you afford not to?

As corporate leaders, in-house counsel are faced with the challenge of determining which new technologies can bring the biggest impact to their operations. As we hear from in-house lawyers and others who have contributed to this survey, AI and other forms of technology can enhance in-house legal departments in many ways: due diligence review, first-draft contract preparation, contract management, legal operation analysis, litigation analysis, legal research and much more. AI can create efficiencies in previously labour-intensive legal processes, and therefore provide counsel with the luxury of time for problem solving and applying legal judgement and analysis.

But the pace with which technologies are developed necessitates a complicated analysis of return on investment, and whatever path is chosen is always done so with risk.

These new processes will certainly influence change within in-house departments and law firms alike. Focusing on where time is best spent and developing a strong base objective is only the tip of the iceberg as these developments continue. Going forward, the legal leaders in organisations will be constantly tasked with seeking technologies that best fit their unique business needs and objectives.

The key for decision makers will be to strategically choose and implement systems and processes that unlock the true potential of their teams, and point the way to the future of their organisations. It will require a change of mindset.

As a strategic business partner to in-house counsel and our members, WSG makes technology and innovation a cornerstone of its core service objectives. With immediate access to distinguished professionals and the real-time sharing of leading-edge information, we support firms and clients in their ability to capitalise on business objectives.

As customers, professionals in and around the legal profession – such as those leaders featured in these pages – will be arbiters of the success, or otherwise, of new tools, applications and services. Professionals such as these are at the helm of this potentially unbounded – yet risky – integration as machines and humans share everyday challenges.

WSG congratulates those who participated in this report, and thanks them for their keen analysis of new technologies – and the future of the industry.

Francesco Gianni

Founding Partner Gianni, Origoni, Grippo, Cappelli & Partners Chairman

World Services Group

Between the reams of paper (literal and virtual) spent discussing the question of how technology will affect the legal profession, as well as the thousands of legal tech companies springing up around the world, technology is on the minds of in-house teams of all sizes and from all sectors.

But, often, what isn’t communicated is exactly how in-house counsel feel about the technological revolution hitting their profession and how their teams and businesses have responded – if at all.

To that end, GC magazine in partnership with World Services Group went out to a selection of elite general counsel from across Europe with a comprehensive survey covering all things related to the use of legal tech at in-house teams.

The responses came from a vast selection of in-house counsel in a diverse range of industries. From finance and insurance, to healthcare and IT, the opinions collected and presented in this report paint a fascinating picture of the contemporary state of technology within the in-house legal community in Europe.

These responses, explored in detail in this report, provide a valuable framing of the wider discussion about technology and its various applications, both from the perspective of an in-house remit, as well as a broader look at its impact on the profession. From the pressures on external advisers to get ahead of the technological curve, to the so-called revelation of blockchain and its predicted effect on how legal work is conducted, the topic is vast.

It’s evident that technology is already making an impact on the profession. Of those surveyed, 84% of in-house respondents reported that they use some form of specialised legal technology within their legal department, with 82% revealing that their department’s use of technology had increased in the past five years. For a profession that’s often accused of being filled with technological laggards, that’s a significant change, and one which only stands to become more pronounced when you consider that every single survey respondent acknowledged that technology can enhance outcomes for in-house departments.

At a base level, there is clearly an appetite for the kinds of solutions being offered in the legal tech marketplace. Why this need has arisen, what form it should take, and what effect this is likely to have on the profession in the long term are more nuanced questions, requiring a holistic view of not just the survey responses, but the opinions and activities of the various players in the legal tech market.

Why bother?

With over 1,400 legal tech companies around the world, the world of innovation has exploded into the lives of lawyers – in-house and private practice alike – with some interesting (and, at times, conflicting) results, not least given the notoriety of the legal profession as an outpost of conservatism.

But there is a clear need, and to predict where legal tech is going, it is crucial to understand what is driving that need for in-house counsel.

For the 84% of survey respondents who indicated that they were utilising specialist legal technology within their departments, increased efficiency was the most frequently cited factor that general counsel were considering when implementing new technology, at 84%. That was followed by ease of use at 50%, customisability at 32% and ability to integrate with existing systems at 31%.

If the pressure driving the push to adopt legal tech is the need to provide the business with better efficiencies and more value for money, then the cost of entry for many of these legal tech solutions is a barrier that needs to be overcome in order to gain the support of the wider business. A clear-sighted approach to tech only intensifies the imperative for a cost-benefit analysis, and, seldom a profit-centre, in-house departments know more than most about the need to do more with less.

‘To remain competitive, we need to increase productivity while enhancing the quality of legal processes against an ever decreasing cost base. In order to achieve this there is no other solution than to embrace technology,’ explains Johan Huizing, associate general counsel EMEA at Itron.

It was common refrain to hear a willingness from general counsel to adopt legal tech solutions throughout their department – but getting buy-in from the business and the necessary budget to execute was a clear hurdle for many. While 70% of the in-house counsel surveyed for this report felt that their company was supportive of implementing new technologies, only 56% had seen this translate to a bigger budget allocation on their balance sheets.

‘If you consider that it’s a strategic issue for you, probably it’s better to internalise, or to invest into some legal tech and then to see the results. I mean invest in terms of putting money into external projects, not only buying a product or a service,’ advises Professor Christophe Roquilly, dean for faculty and research at EDHEC Business School.

But for teams with a smaller head count in particular, taking that first step was often the hardest. Teams with smaller headcounts had the worst rate of uptake of technology, with 42% of departments with less than ten people saying that they didn’t use any legal technology at all. They were also less likely to have received an increase in budget for technology over the past five years, with only 47% reporting an increase in budget for technology (compared with 57% overall). Yet, in many cases, it was smaller teams who thought they stood to benefit the most from tools that can deliver better bang for the buck.

‘There is still the need for smaller teams to provide increased efficiencies, but the budget doesn’t allow for it. It’s then left to us to find ways to use technology to provide efficiency, but essentially for free. That’s not to say it can’t be done, it’s just more difficult,’ said one general counsel from the consumer goods sector.

Some corporates we spoke to were lucky – or large – enough to have internal resources for tackling bespoke software development projects, or budgets for cultivating start-up arrangements – though the latter is much less common for in-house teams than for law firms. But whatever the infrastructure or budget available, investment in tech requires bravery, given the unpredictable return on investment and, in many cases, the long-term nature of that return.

But while budget proved to be one of the biggest predictors of tech use and implementation within in-house legal departments, communication and demonstrating the value – particularly for larger companies which required a higher degree of coordination across existing systems – was also proving a challenge.

‘Money is nice, but implementing a new bit of technology will require the cooperation of the whole business – from the board down to the IT department. So money is something, but it’s not the only thing,’ explains one general counsel from the utilities sector.

Types of tech

The legal applications of technology are vast, ranging from the rudimentary to the complicated. Generating by far the most interest among those surveyed were the basics: for example, the most commonly cited use of technology was for contract management, from 55% of respondents.

But technology can provide legal departments with solutions far beyond a contract management system (often little more than a repository of documents) or a standard contract template.

Software for law firm relationship management, including e-billing and increasing transparency around legal spend, is often seen as a boon, and such tools can be make or break for a frictionless relationship. At present, 20% of respondents cited that their use of technology included tools for law firm relationship management, but based on the interviews complementing the quantitative research, this is an area that appears to be prime for expansion in the short term.

‘We demand use of our billing platform and insist that our rules for invoice submitting are followed. This has increased our understanding of the drivers for outside legal spend and budgeting and resulted in a better control of such spend,’ explains Huizing.

‘We move away from firms that are low performers when it comes to the use of our billing solution or that execute poorly on following our instructions for entering reports or invoices.’

At the least, technology can assist external firms to be more cost-efficient, so that those savings can then be passed on to their in-house clients. But there are more benefits to be reaped from an internal-external relationship that leverages technological solutions. Through this, the firm and the in-house department can cut through the noise that comes from two independent, far-away entities trying to collaborate with one another.

‘We’re building collaborative tools. We saw that a lot of time goes into emails and phone calls between a lawyer and a client. Now obviously that’s part of the personal relationship with the lawyer and client, and that’s not going anywhere. But if you’ve got five emails back and forth trying to describe what part of the land the lawyer is talking about, that’s just inefficiency. So by bringing both the lawyer and the client onto a collaborative workspace on [our] platform, you can cut out a lot of that needless, repetitive back and forth,’ says Ed Boulle, co-founder of legal tech company Orbital Witness.

‘The baseline is that we must be able to communicate very effectively with our external law firms. This requires that they use state-of-the-art communication and cloud-based collaboration software,’ adds Gábor Kukovecz, head of legal and operations at Diageo.

‘In the near future, we will implement a collaboration software, in which we work together with our external law firms, that they must fully implement.’

Far from being limited to external relationships though, tools and platforms which assist legal in becoming more accessible to the wider business also proved popular.

‘Legal is building knowledge management tools to get to a single source of truth – a lot of the technology we’re using, because we’re operating at scale, supports us when we need to have information held reasonably accessible, so that everybody can rely on them,’ explains Nina Barakzai, general counsel for data protection at Unilever.

IBM also has a shared knowledge platform called the Legal Community, which is used to integrate items such as contractual provisions, presentations and internal processor memos on regulations.

‘It’s a collaborative community space, and that’s very useful. You have owners, who can replace or change things on a particular subject, and it is shared with all the rest of us who are members,’ says Vincent Martinaud, counsel and legal manager at IBM.

Legal case management is another popular focus and 40% of in-house counsel surveyed cited case management as one of their uses for technology. This can include the basic paperwork-inducing case management tasks, but can also extend to case review administration and analytics.

Increasingly underpinning many tools is artificial intelligence (AI), as machine-learning tools are designed to quickly parse and categorise vast amounts of information, presenting it back for lawyer review in a fraction of the time taken for junior associates or paralegals to do the same.

‘I really think that our job will change, especially the analysis of documents, because of the way AI now is able to read and understand natural language – including your notes and the ability to decipher a picture, for instance,’ says Martinaud.

At the outer reaches of technology applications in the sector are predictive justice tools, employed to forecast case outcomes, including judges’ decisions – although these are by no means widespread or particularly popular among those who contributed to this report. But, as algorithms creep into our everyday lives, often unseen, the predictive power of technology is encroaching on the legal system itself, for example, in the criminal justice system.

‘[In Spain] work is being done on “algorithmic justice” – for petty thefts and things that are repetitive, the possibility of being able to come up with a first verdict, of course allowing the two parties to appeal if they don’t agree with the verdict, but releasing many human hours that could add value in more complex cases,’ says Enrique Dans, professor of information technologies and systems at IE Business School.

‘All the things related to an insurance claim, traffic problems when there’s no victims for example, these could be very well examined right now, with the current state of technology, by algorithms. You could ask one insurance company to negotiate with the algorithm of the other and get into an agreement, only bringing the human lawyers in if they are really required. That could take away a significant part of the burden for lawyers right now.’

Measuring the impact

When asked whether technology had the potential to disrupt the legal profession over the next five years, 84% said they believed that technology will be disruptive. The real trouble comes when trying to drill down on what form this disruption might take.

Just 6% of those who believed technology will be disruptive in the next five years thought that the disruption would be negative. 66% felt that it would be somewhat positive, and 29% thought that the disruption would be entirely positive.

Short of profession-changing disruption, technological tools like collaborative platforms, AI document review and smart contracts, and the increased automation that they facilitate could adjust the day-to-day lives of lawyers in subtler ways, by disrupting routine, everyday processes. However, introducing more technology often means more constraints on flexibility.

‘It does start to mean a little less flexibility and a bit more rigidity around the terms you’re putting in place and the structure of the relationships – because it has to have been thought out in advance, especially if you have multiple parties involved in supply chains,’ says Chris Wray, CLO of blockchain start-up Mattereum. ‘It’s kind of legal design – mapping out who are the parties here, what are the contractual relationships and what are the key provisions and then, given all that, once that’s clearly in mind, what is it we’re trying to automate, and have we mapped out different kinds of disputes that may arise and provided appropriate procedures for the resolution of those disputes?’

When our group general counsel, Óscar García Maceiras, joined two years ago, he came with the idea of renovating and transforming the legal department. But Santander as a business is also in a huge process of transformation. Maceiras had a concern that we in our legal department in the market – and I think in many other legal departments – were working the same way that we were 100 years ago. We have legal databases, word processing, some digital resources – but we weren’t doing anything special. So the transformational project he envisioned was not only to implement a range of technologies, but also to foster a savvier legal department, with fewer pain points and better cooperation, coordination and efficiency.

The head of transformation role was created only one year ago. There was a need in our legal department to transform the way we work and to start implementing legal technologies, but also to improve things, not only with technology, but with more measures to improve processes and to take a look at how we work with people in the team – which types of lawyers we need now and which type of profiles we will be needing in the future.

Leading the charge

I’m not running a department with many people that I’m taking care of – what I do involves different people from across the department in each project. Day-to-day, I meet these people for different projects, I also meet providers, I do my own analysis of processes – for example, right now I am analysing a specific department within legal, so I am analysing what they do, how they work, what things they will need to start doing, and which others they need to stop doing.

I also need to go to conferences and seminars, because you need to be in the market talking to many people. Recently, I visited London to see what UK law firms are doing in terms of technology and innovation, as the UK is often regarded as best in class in terms of innovation from law firms.

I’m mostly talking to law firms: to people similar to me, such as innovation directors who have this type of role in firms. But I’m also talking to people in-house who, in addition to their own duties, are in charge of innovation. But the problem in many cases is that these people don’t have a real budget for implementation, or even worse, they don’t have the support from the general counsel or the wider business. In some cases their GC says ‘OK, we need to innovate, but you need to do your own work as well, we don’t have the budget and you need to do it at your desk, somehow’. If you don’t have support, it’s very difficult to do anything.

A work in progress

At the moment, for us, implementation of technology is a process. We are implementing a document management system, which is traditional in law firms but not so much in corporate in-house departments. We also have a contract management system.

We are starting to use some tools to give legal advice, for example chat bots, which our internal clients can use before going to the legal department for repetitive questions or areas where there are clear prescribed procedures, like GDPR. To complement these, we are implementing automated workflows to simplify processes and avoid huge amounts of emails – or as many as possible.

One area where I’d say Santander is really at the cutting edge, is using data extraction and data analysis tools for specific projects. In particular, we are using this for cases where otherwise we’d need to have a large number of contracts reviewed.

Transforming culture

The reality is that the transformation process is about much more than technology. In my opinion, it’s more about how to deal with culture change and how to deal with people, because in many cases, people are afraid to change, either consciously or unconsciously – and sometimes it’s very, very unconscious.

As lawyers, I think that we sometimes are used to working in a traditional way, to be very secure. This cultural mindset is difficult to change. But I see it as though you are conquering different areas. First of all, you have some people who are more tech savvy and who are more happy to change, so these ones are easier. But then you also have some reluctant people, so you need to try to get buy-in for new ways of working – and more broadly, for change. To do that, you need to do learning activities, you need to involve people in the project, you need to involve people in the development. Also, critical people will tell you things that you were not thinking at the beginning and the little things help you in confronting these challenges – so stakeholder engagement, early and often, is critical.

I think the future relates to being more efficient and leaving out some tasks that will be automated. Today, in most in-house legal departments and law firms, an important amount of the work that is done could be automated.

Moving forward means going back

If you want to automate contracts, you can do it in different ways. You can do that externally, or you can do it internally – but, for that, you need to train people. Training in automation is not coding – it’s a language – but it’s quite similar to coding, so you need to find people who are good at it, people who enjoy doing it, and who have the time, and then you need to organise a team. We subcontract the automation, but we will be having a small team of lawyers and paralegals who are able to create or update templates.

Some of our legal departments in other countries use data visualisation tools – so you need your lawyers to be trained in using these tools, because they are very useful for handling and understanding massive amounts of data. You don’t need your lawyers to be data scientists, but you need them to know how to use the tools and take advantage of them. However, many people who have been working for a long time are reluctant to use these tools – so then it becomes about demonstrating the difference the tools make and getting buy-in.

I think that Santander is doing great things in relation to innovation – we have projects focused on everything from blockchain to machine learning – so as lawyers, we need to understand these technologies, but also provide legal advice for the new questions and challenges that will arise as a business. In that way, we will be considering all of this for the training we need to give to our lawyers and the people we will be hiring in the future, so that we are able to provide legal advice to innovative projects. If you don’t understand blockchain, for instance, it will be very difficult for you to provide advice on it.

Adaptability and creativity will be very important. Being eager to learn is also important. You sometimes find lawyers who think that with what they already know, they don’t need anything more. For me though, that’s the complete opposite of my expectations of the ability they need to have. They need to be learning all the time. But that doesn’t just go for lawyers, that goes for all professions.

Of all current technological innovations, artificial intelligence has undoubtedly generated the most hype, and the most fear. Wherever AI goes, the image of a dystopian future is never far away, nor is a conference room full of nervous lawyers.

The reality, of course, is quite different. Some corporate legal teams, particularly those already in the tech field, or those at companies handling huge amounts of customer data are ahead of the curve. But, for many in the legal world, the future is a far-off land – for now.

‘When you hear people saying that tomorrow everyone will be replaced by robots, and we will be able to have a full, sophisticated conversation with an artificial agent… that’s not serious,’ explains Christophe Roquilly, Dean for Faculty and Research, EDHEC Business School.

‘What is serious is the ability to replace standard analysis and decisions with robots. Analysis further than that, when there is more room for subjectivity and when the exchange between different persons is key in the situation… we are not there yet.’

Much of the conversation around AI, particularly in the in-house world, remains a conversation about potential. The expanding legal tech sector is teeming with AI-based applications in development, but on the ground, even in the legal departments of many of Europe’s biggest blue chips, concrete application appears to be limited.

‘I think the US may be a bit further down the road than Europe. AI is coming, people are thinking about it, some in a partial way, but it will be developing quickly in the coming years. It may have more or less the same role as the internet had 15 years ago changing radically the way we work, but we’re not there yet,’ says Vincent Martinaud, counsel and legal manager at IBM France.

‘While the legal function may change to the extent that there are tasks we may not do anymore in the future, does that mean we will be disrupted? I don’t think so.’

Those views largely align with the general counsel surveyed across Europe on AI.

Only 9% of those surveyed anticipate AI becoming a disruptor in the legal industry within the next two years. 59% of those surveyed expected AI to be a disruptor within the next five to ten years, with the remaining 32% saying it would not be a disruptor within the next decade.

When it comes to the implementation of technology for in-house legal departments, getting buy-in from the rest of the business proved to be one of the most influential factors in the likelihood that a team was to have implemented technological solutions within their department.

71% of the in-house counsel surveyed for this report said that they felt their company was supportive of implementing new technology solutions. The remaining 29% did not.

This support manifested in the amount of budget allocated to in-house departments for technology spend: just 27% of counsel from non-supportive companies had been given an increased budget to spend on new technology, while 67% of those from supportive companies had seen an increase.

‘Money is nice, but implementing a new bit of technology will require the cooperation of the whole business – from the board down to the IT department. So money is something, but it’s not the only thing,’ explains one general counsel from the utilities sector.

Is your company supportive of implementing new technology solutions?

Those who did feel that their businesses supported them were empowered to actually implement legal technology into their departments: 95% reported that they had used specialised legal technology within their department, compared to just 58% of those who did not receive the same support. They also tended to be from larger teams, with over half being responsible for teams numbering ten or more.

Despite being a predictor for the level of technology use within departments, comparing those who felt their organisation was supportive of the implementation of new technology with those who did not unveiled some interesting insights.

Those who were well supported in the implementation of legal technology (and therefore more likely to have actually done so) were, on the whole, less cynical about technology: just 34% felt that it would greatly disrupt the legal profession in the next five years. At the same time, 39% thought that today’s lawyers were adequately equipped to deal with technological disruption within their profession.

Compare this to those who were not well supported, where 42% were as positive on the question of current lawyers’ preparedness. Just 27% felt that technology would greatly disrupt the legal profession in the next five years.

6% of those who said they did feel that their organisation was supportive of implementing new technology said that they felt that technological disruption would be a negative for the legal industry, compared to 4% of those who did not feel supported.

The amenability of teams to the use of new technology was also significantly different between the groups: 73% of those in non-supportive organisations said that their team members were receptive to the use of new technology, as opposed to 94% in supportive organisations.

This may have as much to do with the composition of those groups as anything. Counsel whose businesses did not feel supported tended to be from larger companies in more traditional sectors. 80% of those that felt their businesses did not support them belonged to businesses with annual revenues of at least £1bn, and 31% were responsible for a team of more than 10 lawyers. Over half were from companies involved in financial services – the likes of banking, insurance and audit.

‘With a smaller team, you tend to be more agile in your budget choices,’ says one general counsel in the fintech sector. ‘Also, with a smaller headcount, the actual investment you’re asking for from the business is likely to be much less than if a multinational bank was to look to adopt a global legal tech solution.’

Of those who reported their company as being supportive of implementing new technology solutions, just 39% felt that today’s lawyers were properly equipped to deal with technological change, 92% felt that AI would be a disruptor to the legal industry and 94% felt that their team members were receptive to new technology. For those who felt their company was not supportive of implementing new technology solutions, the numbers were 42%, 88% and 73% respectively.

We started using special legal software about five years ago. We work completely paperless and our system is based on open tech – it’s integrated into Microsoft Outlook and is basically a legal case management system.

We have increased the number of lawyers, especially younger lawyers, because we don’t need PAs anymore as a result of our completely digital workload process.

We also use contract creation software. We have about 30 templates we are using, which are compiled from boilerplate, so we only have to change the individual boilerplate and not the complete contract, which gives us standardisation.

We use this software for more complex contracts as well – things like distribution and licensing agreements. The next step will be self-service contracts for simpler contracts, giving leads back to operations, like C2C agreements, which can then be done by a self-service team rather than the legal team. So, for example, if there’s a specific clause that should be used, we are only informed that this clause should be used and we don’t need to see the complete contract anymore.

We’re using software for legal spend, and a software tool for speech recognition – Dragon Naturally Speaking. And we are now working with our next step on workflow tools – we have just recently introduced SharePoint, so we are still assessing whether we are going to use SharePoint Flows, or another tool used in our company’s legal system, which is business project management software.

What we see is that there is a trend towards digitalisation and these things are done by automatic workflows. I hope that email correspondence will be replaced with things like assignments, so it’s no longer unilateral but bilateral that you agree what you should work on.

Keeping the team agile

We have just changed from a departmental structure to a new task-based team structure. In my department, I used to have a compliance department, a patent department and a legal department. I just scrapped the departmental structure and organised into teams.

The new structure gives team members more flexibility, and we are using new agile working methods such as Scrum. It gives more freedoms to the individual, and more responsibility as well. It goes away from the typical hierarchical structure to more self-organised working. It’s not enough to change the work or the way you use digital, you probably also need to change your departmental structure to agile methods because new IT is basically about agile.

In terms of team structure, we have a lean manager here in our legal department and I also want to create a digital legal officer. The legal profession is about five years behind usual business standards – we are not used to processes and other things that are common practice in other departments. In order to be on the same level, we need to advance in legal services. The typical handmade agreement would still be relevant, but the new role of the lawyer is more likely a legal process designer to some extent. The normal functions like fire fighting, corporate governance and compliance will still be in existence, but I would estimate that the typical contract work is going to reduce over the next five years, and be replaced by digital data processes including bots asking and answering questions – because there are already those tools available. This can be – at least for some legal work – disruptive change, and that’s why we concentrate on this: to be competitive in the future. We want to provide services that are still asked for by the company. But this will create and maintain jobs, and may even create future jobs, because it’s not just legal advising anymore – we are part of the process and the value chain.

A digital legal officer probably will not code or programme like an IT programmer, but they will compile software tools with intelligent applications. There are already tools available on the market that allow, on a high level, programming – this can be done by the individual, taking it from IT, which is too slow. We need incremental changes, not wholesale changes every three years or so.

We need to have lawyers who have some affinity to IT to specialise also in IT processes, so some of my lawyers need to be able to at least configure software if not even programme software. I personally can programme – I have learned it. To find lawyers who have affinity to IT is not easy, but we are looking for these skills nowadays when we are hiring lawyers.

Technology that works for us

I’ve been doing this for almost 30 years. When I started, computers had just started and all of the work was paper-based. The communication channels were yellow post, the telephone and maybe some rudimentary email function. Then, things evolved to the point that even a lawyer was the slave of the computer. And what I see coming, and I hope to be coming, is that computers will work for us and not us working for the computers anymore. I hate to see people sitting before a desktop all day and using email chat as the only source of communication. This is not effective, it is not efficient and it needs to change.

The challenge of employing technology is internationalisation. I have 27 legal departments worldwide, and to introduce such tools into smaller legal departments is a challenge. Is the internet speedy enough to train people to adapt technology to local needs, for example? There are legal challenges like attorney client privilege, e-discovery and, of course, EU data privacy.

The main future technology trend, I would think, should be smart contracts. Intelligent, smart contract creation and tools that help us for that purpose, in order to get rid of this standard work.

Another is effective communication. Even Skype for Business and other tools do not really replace personal communication. Often internet bandwidth is not good enough, the quality of the picture is not good enough, so there’s quite a lot which needs to develop in order to replace personal communication and save travel time.

That’s a learning curve in and of itself: replacing personal meetings with virtual meetings. It’s easy to say, but difficult to do. I just tried to have a conference of my main lawyers worldwide, through time zone differences of 12 hours, with five continents and 12 participants. It was almost impossible to have a discussion.

The third one is knowledge management – I think knowledge management, with AI and so on, will change. Typical features in a search function will be replaced – ten years ago, you were looking into books, now the first way to look is to search Google – but this will be more intelligent.

Asking the right questions

In terms of technological innovation, I don’t see the support from the law firms. Everything they offer is to increase their business and not to increase mine. That’s not enough anymore – they need to make my work easier, and not the other way around. This is a typical situation: I have an M&A deal and I am asked to use the law firm’s data room, and adapt to their way of thinking. They are still exchanging emails. So with everything I do, I have to adapt to their system. I am not interested anymore. It’s time consuming. As with many other service providers, they should look at how they give me added value with their offerings – seeing what I need and trying to offer a tailor-made solution for my purpose. They never even ask the question.

Not the usual route

I started my career as a prosecutor, working with government for several years before I accidentally fell into an in-house role. I started my in-house career as counsel at a mid-sized medical management company that was working off a technology-based platform. Because I’d worked there first as a lawyer, I got interested pretty early on in process optimisation and streamlining.

From there, I worked in big pharma for 12 years, undertaking a lot of self-initiated projects, which is where I started to see opportunities for improvement and optimisation. I intentionally sought out projects that looked to restructure the way we were handling things, particularly through streamlining and automating processes.

That led me to becoming one of the founding members of a legal incubator that started at Boehringer Ingelheim. I was part of a group of five or six people from around the world who worked in the legal department – though not necessarily lawyers – trying to operate at a high level and find what we could do within the organisation in the innovation space. That got me meeting a lot of other people in the legal innovation industry, while seeing what was out there and what was still missing.

Incubating ideas for better business

For the internal legal incubator I helped set up at Boehringer Ingelheim, the notion wasn’t actually to implement anything – the notion was to go out there and explore what was outside the organisation and available outside in other spheres of the legal world, but also to explore internally and discover some really out-of-the-box and interesting solutions that might help the organisation with certain internal needs.

They tried to pick a cross-section of people from a legal organisation – lawyers and non-lawyers in different parts of the world – and said ‘come up with ideas’. We all ended up with our own pet projects in what we were focused on and there was a lot being done as individuals to then bring back to the team. But above all, we were told to structure it however we wanted to.

It was essentially an idea machine and then up to the organisation to say ‘Do we want to implement those ideas?’

As far as we could tell, it was the first of its kind. When we started to go out and talk to people about it, there was a lot of excitement. Lots of organisations focus on innovation, but we had never heard of it being initiated by the legal department, particularly from the viewpoint of those who were looking really strictly at what the in-house legal department was doing. To add to that, I don’t think a pharmaceutical company is at the top of the list when you consider who is going to be thinking outside the box!

Filling a need

What innovation means and what makes sense depends on the kind of organisation you are working with and what their needs are. It could be something very small or something very big, but I think it’s a very individualised decision, rather than a lot of what is being marketed out there. Put simply, out-of-the-box solutions aren’t always for everybody.

As a consultant, I’m not aware of anyone else that is defining themselves this way. Certainly, there are many other organisations who are competing and innovating in the legal tech space, but to look case by case at an organisation’s needs and ask ‘How can we do this differently? How can we think about this differently?’ in order to create innovative solutions – I don’t really know anyone else who is focused on it in the way that I am. Which is to say, I’m not out there marketing a tech solution. There are companies who do that and have the expertise for it. I am more focused on the needs of the company I’m working with. That might be a technology solution, but to me that’s usually going to be one piece of a bigger puzzle.

I think all companies want to be innovative and want to do things better, but I also think that when people have talked about innovation in the past, they are trying to tick a box as opposed to really thinking about what it means for them. For example, the place where companies struggle in a big area that I worked in would be transactions – and if you are really looking at doing something radical in the transaction department within a larger organisation, it can take a lot of work to get there. It can also frequently involve major corporate culture shifts, and a lot of the time somebody is interested in talking about it and I think they are interested in doing it, but the reality of implementation might not be there, or the cultural change required to make the changes is not possible either.

I don’t believe innovation for the sake of innovation is necessarily appealing. Often when people are talking about innovation in the legal space, they are solely considering technology. The challenge is to think more broadly – and not just about buying a ready-made solution out of the box, but instead weighing up what you can do with an organisation to differentiate how you provide legal services.

For me, the bottom line is that tools don’t replace people – someone still needs to be responsible for the process. A tool is out there if you need things that monitor turnaround time, ageing and expirations, but you fundamentally need good people to do the work. But those people, too, are changing. When you look at the legal industry, it is changing rapidly, but you’re also looking at lawyers who are coming out of law school with a different mindset and skillset than those who emerged 20 or 30 years ago.

Looking forward

We keep talking about innovation in law firms, but I think we thought it was going to be further along in some areas than it currently is. I believe it plays a huge part, but I think the more interesting conversation is about where you cannot replace lawyers with technology. A big piece of that is on the counselling and ethics side. I don’t think it is going to be as easy to replace an ethical determination and counselling with computers, as it is to automate an NDA.

All we have really seen in terms of legal innovation tends to be on the technology side. My sense regarding the in-house team would be the role of the CLO growing to become someone in the legal department who is more in charge of operations. Somebody like that would be well suited to try and implement the innovation teams in-house. By and large, law firms are significantly behind the curve. They are still doing things the old-fashioned way, and I think there is tremendous room for improvement and optimisation in law firms in particular.

GC: What are the main themes running through Unilever’s use of technology?

Nina Barakzai (NB): Firstly, that tools should help us work more efficiently; secondly, implementation is a journey and we must see benefit; and thirdly, technology is disruptive but helps us build our professional competence as an in-house legal team supporting the business.

GC: Can you give any examples of technology initiatives used at Unilever?

NB: At Unilever, there are numerous technology initiatives spread across different business functions. We aim to be at the top of the list when it comes to talking about tools to help us work more efficiently. Some parts of our business use blockchain for certain types of activities; others have introduced a chatbot with machine learning to continuously improve the systems they use. Legal is building knowledge management tools to get to a single source of truth – a lot of the technology we’re using, because we’re operating at scale, supports us when we need to have information held reasonably accessible so that everybody can rely on them.

Implementation of this new capability is an ongoing journey to embed benefits and continue to develop and improve our processes and contract management. For example, Procurement implemented a contract lifecycle management tool. During that implementation phase, we found that the learning process was as much about adjusting to the realities of the software, as it was about doing what we needed to do. We have general terms and conditions and smarter contracting to tailor the generic terms, where appropriate. Internally, this shrinks contract life cycles, to deliver a consistent, end-to-end, contract automation process.

GC: What are some of the challenges of rolling out new technology?

NB: There is an enormous appetite for doing things efficiently. It’s obviously challenging if we’re in 190 countries and generate 190 country contract processes along the way. We have about 80 preferred partners worldwide who are working alongside us, who design things with us. That creative engagement is absolutely vital, because we design processes with our partners and us in mind. Together, we make space for collaboration.

Some of the billing that we get with our preferred external law firms has been adjusted so that we both can work within those formatted structures, and we use platforms that are well established in the market. Our focus is to help ourselves and our partners manage how we work together, so that we know when they are getting certain information, and we know how to keep everything running smoothly. We’re working, adjusting, enhancing, improving and making it more efficient.

For some, anything new is a challenge to understand, learn and embrace. Others ask what will make life easier and want it immediately. There’ll be others who like to experiment and gradually incorporate new tools into their activities. We may not always have the luxury to deep-think every activity because sometimes we have to deliver advice and work with the business to execute specific outcomes. I think everybody goes through this type of experience at some stage. But I haven’t found anybody who doesn’t use any technology yet. I’ve found many people who are using lots of different technologies in lots of different ways, which I think is thrilling.

From my perspective, I like working with technology that is disruptive. It means I get to experience exciting developments as part of my work, with the added benefit of making my life easier. I think everyone who is in a fast-paced environment works to stay relevant and up to date, or risks disempowering themselves or being less effective. I’m conscious that not everyone thinks of these things in the same way or with the same enthusiasm. Working with technology needs to be made accessible. It’s easy to switch people off by making them feel they are somehow less capable because they cannot work a particular system, application or device. That doesn’t mean they’re bad lawyers, it just means they may need to have the information presented in a way that they understand.

GC: What does new technology mean for you?

NB: I’m tuned into how I can make better use of technology because that’s my work: I want to be able to handle data responsibly all the time, every day, every minute. I will always look for tools that keep me up to date and enable me to deliver privacy advice smoothly. Staying up to date means doing constant professional development. Practice makes perfect, but add in CPD and it reinforces the professional drive to stay up to date to do the best job for your clients. I want and enjoy doing a better job for my clients, so I work hard to understand the environment in which my clients are operating. Clients are doing more with more data, and that brings scale and complexity. I need to understand that.

One of my tasks is to help design control solutions in a privacy context. If there is a quick, easy way of determining whether, say, control 623 is more relevant than control 17, when working with, say, hundreds of controls, that will help me. People are more likely to make errors when operating in teams, running at speed to deliver cybersecurity and privacy controls. If internal advisers are on the move in factories or out in the field looking at tea crops, raw materials and other front-line activities, how do we make sure that they can see privacy advice and have information in bite-sized chunks, at their fingertips? So, just as in our everyday lives we look at platforms like YouTube to see how to work the cooker or to understand instructions for flat-packed furniture, we are making more video blogs and developing alternative ways for the business to access information on legal, privacy and cybersecurity topics. I’m looking at how to make things available via mobile, on devices. A key requirement is to make sure these alternatives work across multiple jurisdictions, making it easier for people to learn from the materials and leverage their own skills.

GC: Is there any technology you would like to have in future?

NB: Looking forward, I would like an AI bot for developing what I nickname a ‘privacy university’. People may think up creative ideas for dealing with privacy needs in their business areas; others may feel anxious that, although they are experts in one or more areas of law, they don’t have a good grasp of privacy laws. My hope is that, through the use of technology, my colleagues can ask a simple question all the way through to a more complex query. A privacy bot that can give a quick answer, in a tailored business context, could help a colleague along an entire spectrum of knowledge, simply by being a starting point for additional resources. Colleagues can work with confidence, knowing where to look and who to ask. My task in privacy is to help change their inner thought of ‘I don’t know what the question means’ to a feeling that they know where to get guidance, get help in understanding the question or, better still, find an answer that can be tailored and made relevant for the issue on which they are working.

Unease with the anticipated digital and disaggregated future is real in many dusty corners of the legal profession, and with around 1,400 legal tech companies fighting for a share of the global legal services market, the prevailing story has been the threat these offerings pose to traditional law firm models. However, this narrative hides a subtler shift in how some law firms are approaching this impending disruption: they are working with the innovators, not against them.

Getting into bed with the enemy

In the past two years, law firms have started to create technology incubator programmes within their own walls. Much like the ecosystem of incubators and accelerators famous in Silicon Valley and tech hubs around the world, the idea is to take a business concept in the early stages of development and provide any combination of support, mentorship, facilities and even investment.

This shift might seem counterintuitive to some: why would the old hands team up with the young upstarts whose end goal, in many cases, is to capture the law firm’s own clientele of general counsel who are under continued pressure from the board to minimise their contribution to the $600bn dollar global industry that is big law?

For some firms, engagement with start-ups is the result of a process of introspection, one that began in an attempt to root out the pain points of its lawyers’ working lives.

This growing cohort of law firms is convinced that that there is much to be gained from a willingness to demonstrate a pragmatic grasp of today’s legal marketplace.

Typically, the rewards for the law firm are financial: should they hit on a unicorn, the monetary returns can be huge, as well as the reputational boost given by being associated with a true disruptor in the legal market.

But while the money and fame are both good, oftentimes, the best rewards are less tangible.

‘It’s true; it’s difficult to show to the business real and tangible KPIs. They are more intangible ones,’ says Francesc Muñoz, chief information officer at Cuatrecasas, one of the many law firms around the world who have entered this space. Cuatrecasas is a Spanish firm that has teamed up with innovation platform Telefónica Open Future to create Cuatrecasas Acelera, an accelerator now on its third call after launching three years ago. Cuatrecasas Acelera supports companies at the pre-series A1 phase with mentorship in marketing, finance and business models, as well as 20 hours of free legal advice from 40 participating Cuatrecasas lawyers.

For Cuatrecasas, working with a multinational blue chip like Telefónica has amplified the reach and impact of its Acelera programme. But Telefónica itself also reports the benefits of collaboration in extending influence in the innovation space.

‘On one hand, our network of partners extends our reach and provides us with shop windows to new industries and ecosystems. This allows us to learn from them and eventually enter new markets, hand in hand with market leaders. On the other hand, our partners help us improve our value proposition to entrepreneurs by putting more resources, investment and business development opportunities on the table,’ explains Agustín Moro, global head of partnerships at Telefónica Open Innovation.

‘But some of the start-ups that we are helping become small clients and we hope that they become, in the future, big clients. So you are putting some seeds into the business sector to see if start-ups grow in the future,’ Muñoz adds.

Those seeds could include investment, although that is not the point, says Muñoz. At Cuatrecasas Acelera, the firm doesn’t take a stake in the businesses that pass through the programme. But the agreement includes an option that, at the next investment round, Cuatrecasas could invest under the same conditions as the lead investor, up to a percentage.

‘It’s really quite a minor percentage of the start-up. It’s completely an option, but other acceleration programmes take a stake in advance of 2%, 3% or 5%,’ says Muñoz.

Culture change

But there is a broader cultural benefit to be enjoyed much sooner, according to Muñoz. ‘You are putting the most innovative people that you can find in your sector in contact with your lawyers, with your teams. It creates a really beautiful circle and a lot of passion within the people that are interacting with them and giving advice,’ he explains.

The head of another law firm-founded incubator agrees: ‘I’ve seen how the legal sector is quite traditional, but also how the firm’s people – the partners, the associates – have actually become a lot more innovative in their thinking just by spending time working on a day-to-day basis with those start-ups based in their building. And actually, with the companies from last year, the majority have continued to work with the firm and have integrated inside, so the firm is now using these new technologies, making them a whole lot better, and they’ve changed their own mindsets, too.’

However, opening up to innovation often means letting go of a mindset focused on success, ingrained by the often adversarial nature of both litigation and corporate law. The reality of start-up life is the ever-present whiff of failure, and that is something that law firm lawyers, accustomed to being the experts, must adjust to. For many, that’s a case of learning how to ‘fail better’ and move on. Being the expert in one vertical might simply not be enough in today’s marketplace, where openness to innovation might be less of a soft skill and more of a business imperative.

‘As a former lawyer for stock markets, I always keep an eye on the new trends in the legal tech niche. The transformation speed in this traditional vertical is so fast that I could not think of a law firm that aspires to be market leader without working with start-ups and using their technologies. All the leading firms that I am aware of have programmes or initiatives to capture and benefit from innovation,’ says Moro.

Making a mark

In a profession often noted for its resistance to change, there can be kudos for those bold enough to be a first mover. According to Edmond Boulle, co-founder of Orbital Witness, a start-up real estate intelligence platform that employs satellite imagery and property data analysis to flag legal risk in real estate transactions, there is a clear advantage for those who get in on the ground at an early stage in technological development.

‘They have a meaningful say in product development. We are listening to that and we are designing our products around the things that they are telling us are painful. They are seeing iterations of the product and feeding back on that, so if you’re an early adopter, you’re bespoking it a little bit to your style of working. As soon as you’ve got a critical mass of customers, it ceases to scale from the start-up’s perspective to adapt your product to individual needs and preferences, and from the customer’s perspective, it’s more of a fixed offering,’ he says.

But, perhaps the bottom line speaks loudest. A spokesperson at one law firm accelerator claims that a growing willingness to embrace technology has meant that not only is there no better time to be a lawyer – but that the efficiency savings of legal tech could even grow market share.

‘Let’s be fair, some parts of a lawyer’s job are not very fun. You don’t want to stay up reading the same lease a thousand times, you don’t want to chase signatures at midnight or hang out at the printer. You want to do the legal work and so the technology enables that by taking away a lot of the drudgery. The smart lawyers understand that they can pull that off, they can get more work, win more competitive panels, they’ll grow their share of clients and have a more fulfilling legal practice.’

A helping hand from Goliath

For the legal tech start-ups themselves, the benefits are much more tangible. For Orbital Witness, coming into the MDR LAB, run by UK law firm Mishcon de Reya, was an opportunity to adapt a fledgling space tech concept – it was the earliest stage company the lab had taken on in its first cohort – into a viable legal tech one, by gaining an inside view of the workings of a law firm.

‘The genesis of the Orbital Witness platform, frankly, was seeing lawyers’ desks covered in papers – from the local authorities, from specialist search providers, from the Land Registry – and every time they were trying to find a piece of information talking about a property, instead of being able to jump to what they wanted, they were either searching through document management systems on their computer or rooting through the desk strewn with papers. It just struck me as very laborious,’ recalls Boulle.

But on top of the opportunity to forensically analyse the working methods of 40 lawyers in the firm, Orbital Witness was able to learn about the real estate industry beyond the legal side and, crucially, meet some clients.

‘We’re piloting with a few of them now. And we’re actually going a little bit further than that as well: we’re building collaborative tools. We saw that a lot of time goes into emails and phone calls between a lawyer and a client. Now, obviously, that’s part of the personal relationship with the lawyer and client, and that’s not going anywhere. But if you’ve got five emails back and forth trying to describe what part of the land the lawyer is talking about, that’s just inefficiency. So by bringing both the lawyer and the client onto a collaborative workspace on the platform, you can cut out a lot of that needless, repetitive back and forth,’ explains Boulle.

Other benefits for start-ups that join such innovation spaces might include the opportunity to adapt an existing product to a new legal and regulatory environment, or to get that first customer. Those in the latter position face a slow, and sometimes demoralising sales cycle into big law of 18-24 months.

‘We started as a DMS (document management software) six years ago with a focus on law firms. After some years, we realised that law firms are slow to decide and that they don’t have the big budgets large corporations have for growing their organisations. Therefore, we changed our strategy and began offering our product and service to large corporations,’ explains José Manuel Jiménez, CEO of Webdox, a Chilean start-up and beneficiary of Telefónica’s Wayra Chile programme.

Beneficiaries of law firm accelerators benefit from compressing that cycle by piloting their technology to an audience with an intellectual, if not financial (yet) stake.

If a law firm doesn’t ultimately take the bait, the legal tech model, often comprised of Software as a Service companies charging per user even while their founders sleep (as opposed to billing hours), seems to be increasingly appealing for institutional investors – which bring professional management expectations and software company economics into the legal tech ecosystem.

Don’t fear the new legal ecosystem

The result of all this is a new ecosystem within the legal community. Firms are no longer at odds with legal innovators, and lawyers shouldn’t let a fear of ushering in their replacements stop them from securing benefits of their own out of this new norm.

But is any residual fear within the legal services industry justified? At Cuatrecasas, Muñoz thinks not: ‘We don’t see lawyers disappearing from here; we see keeping probably the same amount of lawyers – doing different things, sure, and in a different way, sure – with more support of technology, probably working much more with engineers in order to set up a full legal service, not only legal advice.’

Boulle agrees that the sector will change, but not necessarily to the detriment of lawyers. ‘Certainly the product that we have now is just about starting to make their lives easier and better, and it works in symbiosis with them – we can’t work without lawyers,’ he says.

‘I think there is room in certain parts of the industry to remove particular tasks from lawyers altogether. I don’t think of ours as a “putting lawyers out of a job” tool, it’s just simply saying there are some things where, if the volume and cost of the work means it’s not feasible to have a professionally qualified individual doing a detailed analysis, it makes more sense to balance the risk and the cost and have a machine to assist in the process.’

In-house legal departments, driving this market with their continued disaggregation of external support, also stand to benefit from a diversified job market for their own skills, as the legal tech sector expands, offering hybrid legal-entrepreneurial roles.

Of course, this is likely to be some way off. Legal tech companies with true brand recognition remain few and far between, with much of the investment cultivating companies applying state-of-the-art technology to commonplace tasks like contract review – hardly the stuff of dreams. And as companies progress beyond the start-up stage, growth will be a challenge, as multiple small operations compete for the bandwidth of law firms.

If the law firms incubating and accelerating legal tech are to believed, private practice has more to gain than lose from embracing technology. An easier life, greater professional satisfaction, and an enlarged – and happier – circle of clients who remain loyal because they share in the efficiency dividend all beckon for those with open minds.

But for those who think that is too good to be true, perhaps becoming a stakeholder in the digital future is at least a way to avoid ending up at its sharp end – sharing the gains of technology rather than counting among its casualties.

It’s no secret that general counsel are being asked to do more with less – in fact, that’s likely true for almost all facets of business in the current climate. But rather than piling up hours at desks to make ends meet, the results of our survey suggest that an increasing number of in-house teams are turning to technology in order to improve efficiency within their departments.

80% of the in-house counsel surveyed reported that the use of technology within their departments had increased over the past five years, with 21% describing that increase as significant. But that number didn’t align with an increase in budget for technology, with only 56% reporting an increase in budget over the past five years – a figure which the underlying numbers reveal to be significant.

Of the 44% of respondents who did not receive an increase in budget, only 4% reported a significant increase in the use of technology within their departments, with 30% reporting no change or a decline in use. That figure stands in contrast to those who did receive an increase in budget, where 86% of departments reported a subsequent rise in technology use – suggesting that those teams who did receive an increase in budget were not only spending it, but ensuring that it was being deployed across their departments.

For those with stagnant budgets but a desire to utilise new technological solutions, looking internally instead of externally was a common solution – although the numbers suggest that it’s not having the impact seen by those with deeper pockets.

‘Because we’re at heart a technology company, we’ve been able to mobilise our internal resources to help our department become more modern. Our IT department have been proactive in working with us to implement new systems, while members of the legal team have sought solutions which emulate what other departments are doing, only without the associated cost,’ reported one general counsel from the IT sector.

That sentiment wasn’t uncommon – particularly from general counsel heading smaller departments. For legal teams of ten people or less, only 47% reported seeing an increase in their budget for technology.

‘There is still the need for smaller teams to provide increased efficiencies, but the budget doesn’t allow for it. It’s then left to us to find ways to use technology to provide efficiency, but essentially for free. That’s not to say it can’t be done, it’s just more difficult,’ said one general counsel from the consumer goods sector.

Have you received an increase in budget for technology over the past five years?

Teams with smaller headcounts had the worst rate of uptake of technology, with 42% of departments with less than ten people saying that they didn’t use any legal technology at all (compared to 7% of departments with more than ten people). Despite that, all of the general counsel from smaller departments who were yet to implement specialist legal technology said that they believed it can enhance outcomes for in-house legal departments.

One general counsel from the food and beverage sector said that while they saw the potential for technology to have a positive impact on in-house legal departments, for smaller teams, the type of work it could currently assist with meant that it would not provide a meaningful return on investment.

‘Technology will improve efficiency on a long-term basis, however, this will most apply for standardised processes or transactions. Larger teams will see higher benefits. At present, I do not yet see a great benefit for small teams dealing with non-standard issues,’ they said.

While reporting a moderate increase in the use of technology within his own legal department, Konstantin Pogrebezhskij, deputy head of legal for Kronospan GmBH, says that a small headcount – not necessarily budget – can make implementing meaningful technology solutions a challenge.

‘The main disruption for us, generally, is the time required to customise the technology solutions and fill the data into it. At some point, you feel that you waste the time saved by the technology just to keep it running,’ he says.

For teams with a larger headcount, particularly those with more than 50 people, technology was seen as a higher prerogative. 100% of respondents in legal teams numbering between 50 and 100 employees said that they had both received an increased budget and had actually increased their technology use in the past five years.

Those with very large legal teams – those with a headcount of more than 100 employees – fared slightly worse than those with a headcount of between 50 and 100, with 61% reporting an increased budget and 72% saying their use of technology had increased.

One general counsel from the banking sector attributed a lower increase in budget and technology for the very largest teams to an unwillingness of these general counsel to upset the status quo.

‘Technology forces in-house teams to identify low-level repetitive work and to find solutions for it which do not involve large amounts of legal manpower,’ they said.

‘That remains a challenge and perceived threat for a certain cohort of in-house lawyers, but an opportunity for those genuinely keen to focus on more strategic work.’

The use of technology by in-house teams is evolving – particularly compared to what existed a few years ago, two years ago, or even one year ago. Yet still, for legal departments, change is much less quick than in law firms.

Big legal departments are investigating the possibilities and opportunities offered by new technology. There was a survey done in 2017 targeting French in-house counsel, which showed that many needed more software and applications for legal tasks. But at the same time it was more commonly expressed – by more than 50% – that this was not a need at present.

I wouldn’t say there is a kind of collective trend: I think it really depends on the culture of every individual, every lawyer, the culture of the legal department, and the culture of the company itself. But if I look at a period of five years, there is an increasing trend towards a willingness to understand what is happening, what works and what does not work in terms of technology, what the best practices to benchmark for in-house lawyers are – and also to think in terms of investment and return on investment.

I remember speaking to the GC of a very big French company. He said, ‘You know, I’m convinced that some of this technology is going to be very useful for the legal department – but there is a cost, and I need to convince the executive committee, or even the board, that the cost is justified: that we expect a return on investment, so it means cost reduction for the legal department, how we are going to be able to increase the performance of the legal department in terms of service delivery, satisfaction of the clients and also improvement of our own KPIs.’

(Virtual) reality check

Areas in which some in-house teams in France are using technology include legal research and information, case matter management, contracts management and contracts automation, legal knowledge management, and project management. And, of course, e-billing, selection of legal service providers, benchmarking, sharing of the best practices within the legal team – and this is especially the case in big legal departments. Some of them are using predictive justice tools – although it’s very few, it’s just the beginning – and I would say it’s more used by law firms than legal departments.

As far as machine learning and real artificial intelligence go, I think we are still a little bit far away from that. For blockchain, especially for smart contracts, there is a start: for instance, for intellectual property rights management. Some are thinking about the possibility of using blockchain technology to manage the participation of shareholders during general assembly. There is also the smart contract approach of using blockchain technology for contracts between shareholders, for instance to organise the control of the company, or to have agreement provision in the case of share selling. As far as I know, legal departments do not directly use big data analytics, but they can work with some law firms that do.

I think that the particular areas right now where the technology is the most useful are document review, case review administration and case analytics, legal research, document drafting, knowledge sharing and communication. But when you think in terms of legal writing and advising clients, I think that – right now – the effect or impact of the new technology and data analytics and so on is very low.

When you look at the current legal technology and new legal technology and what they propose in terms of services, it’s moving really fast. But the next steps – more deep learning, machine learning and real artificial intelligence – frankly speaking, will not come within ten years. The creator of DeepMind, which was acquired by Google, said something which was really interesting: when you hear people saying that tomorrow everyone will be replaced by robots, and we will be able to have a full, sophisticated conversation with an artificial agent, he said no: that’s not serious. What is serious is the ability to replace standard analysis and decisions with robots. Analysis further than that, when there is more room for subjectivity and when the exchange between different persons is key in the situation, the Turin stage of artificial intelligence, machine learning, deep learning, deep thinking and so on is not at the right level. We are not there yet.

Redefining value add

One important point when considering the value of technology – something which is happening in some law firms already – is change in the value chain of the legal department.

Typically, you have information entered into the ‘system’ of the in-house team and, at the end, you need to provide a service – advice or a solution. All the segments of the chain, like information gathering, information analysis and treatment, document drafting, due diligence, are going to be more and more digitalised, and done increasingly less by human beings. This means that the skills required for lawyers are going to change, and the quality of the relationship between the client and the legal adviser is going to become more important. Right now, I don’t see any robots directly advising clients because they are not sufficiently sophisticated. But for the lawyer to give good advice, fully understanding the needs of the client and having sufficient time to discuss their analysis with the client – what are the facts, what is the law, what is the content of the regulation, what is the state of the jurisprudence or case law – all of this is going to be done faster, which will leave more time to deliver very high quality advice and service.

The freed-up time can then be used on other important areas. Lobbying is one of them because, surprisingly, in France, the lobbying role of lawyers is not always taken into account by legal departments. Giving the possibility to legal teams to think more about the future of the law in their domain regarding their businesses or the businesses of the company is very important, but you need time to do that. It’s not directly productive, but it can have a huge impact over time. It will also allow departments to take time to train non-lawyers and to increase the global level of the legal education in the company – to reduce the common questions. The other side of that is that there’s also the potential to increasingly automate processes – improving efficiency and quality of services across the board.

Training lawyers of the future

What we need to be doing in the here and now is, when we train future junior lawyers, they need to know how to use data analytics, how to use the new tools which are available on the market, and maybe we also need to train them to understand how algorithms work, even if we are not going to create hordes of lawyers who can code. To understand what it means when you code, and what are the consequences in terms of legal mechanisms, legal analysis, or legal documents, to have fundamental tools to understand what coding means, is going to be very important for them.

The second important point, I think, is to reinforce their soft skills, because the relationship with the core business will be more and more about the quality of the relationship. For instance, what about empathy? Being able to take time to listen to the client, to take their point into account. Knowing that the time you spend for legal research, information retrieving and analysis is going to be reduced and reduced and reduced, if you want to maintain the same revenue for a law firm or the same level of service for a legal department, you need to perform better elsewhere.

As educators, we need to be doing these things. If we do not, we hear from young students who are going to intern for six months or a year, coming back from legal departments or law firms saying, ‘Well you know, we had to work with this tool or that tool, or there was discussion about using a new tool to improve the relationship with the external suppliers, e-billing, and so on, and we didn’t have any clue about what they were talking about.’ Even if you are not convinced, you need to better train your students on these kinds of tasks because they ask for it. There is a demand for it.

Practitioners know better than academics what are the most up-to-date tools they are using in the industry. But I think it’s the role of academics to prepare students to be able to be flexible, reactive and to be able to switch from one tool to another one and to have a global vision, a global understanding of what is happening. And to make them aware that there is a certain level of uncertainty in practice. Usually, when you study law, you do not like that: you like certainty, and the more it is fuzzy or blurry, the less you feel comfortable. We need to prepare them for that.

Technological Darwinism

Now, the question is: is technology going to kill some jobs? I would say, yes of course. Will it promote the creation of new jobs? I think so. Will it change the type of skills required for lawyers? I think it will. I think that the development of these new tools is more an opportunity than a threat if they provoke a change in the business models and the way lawyers deliver their services in the interests of the client. But if some so-called artificial intelligence can lead to weak services and fragile legal advice, then they will be stopped or simply not used. So I think the market will decide and will make a distinction between good stuff and bad stuff.

It seems strange, because sometimes lawyers are perceived as being very conservative, but I can tell you that in France, the legal domain is just after finance in terms of being active in start-ups. I mean, legal tech versus fintech versus other kinds of activity – legal tech is very, very active. Recently, I was surprised to find that that the legal tech that we observed two or three years ago is still alive. Maybe, at the end of the day, you have a Darwinian system where the most adapted survive. You cannot have, for instance, tonnes of companies in France proposing predictive justice because the market is not so big. But I would say that the legal domain is very well placed in France, and could rank well in terms of intensity and innovation; it’s very active. Which is surprising, because lawyers are perceived as being the most conservative compared to some other professionals.

An important objective or challenge is to make in-house counsel more comfortable with the technology, doing demos, sharing success stories, sharing best practices and, to a certain extent, kill the myth that technology is too complicated: that it’s not for you guys because you are lawyers.

I would say that at Bombardier Transportation Group, we’re not using technology in the way we could be and should be using it – I would self-critically say that we’re in the bottom third if I look around – but we have taken the decision, as the leadership team in the legal community, to tackle it.

Global application

I see two challenges of employing technology in an in-house legal context. One is budget and the second is that we need software applications that work around the globe. It doesn’t help us if we find the perfect solution for the legal team in Germany – we need to find the global application that the legal team can use in the UK, in France, in Sweden, in Thailand, in the US, in Australia, in South Africa, in India – you name it. It needs to be a software that is so generic that it can be universally used, possibly also in different language settings, because despite being a global firm where English is the company’s language, we still do have local languages used in contracts.

Be brave: think long term

Budget, of course, is always an issue because you need to have a convincing business case. You need to go to the CFO and say, ‘I need the budget of X, I will invest in legal tech applications, and the return on the investment is Z, and Z is higher than X.’ But how do you make that case? I would not like a conversation, which I’m concerned some of my colleagues have had, where the CFO says, ‘Sure, I will give you the budget of X, but then please sign here that you will, in return, reduce the head count in your legal team by 20 or 30%.’ It doesn’t work like that.

I think the return on the investment in legal tech and software application is mid term and long term, it’s not short term. It’s not: you buy this software or this contract generator, or this chat bot and then Peter and Paul can take a hike. It’s not that simple, and if that’s the equation, then the equation will fail and in-house legal teams will not be successful in convincing their CFOs, because they will be shooting themselves in the foot. In the long run, they may have a lower need to hire new in-house lawyers. Even in the mid term I would say that’s doable, but not in the short term. You need to be brave to make the investment, because it’s difficult to predict the yield of return from the investment for the legal team.

Window-shopping for tools… and best practice

I see the benefits of legal tech software and legal tech applications not as a means to cut down on headcounts in in-house legal teams, but as a means for in-house lawyers to be relieved of wasting their time on administrative, repetitive, non-value-add work, so they have more time to spend on brain work where, luckily, software is not yet better than the human brain or the legal mind. I really see it as an enabler to focus more on value-added legal work to support bringing the business forward, so I think we are doing our own in-house lawyer profession good if we find ways to manage our time and our energy better. I’m coming from the perspective of increasing the efficiency, effectiveness and impact of in-house lawyers, rather than just looking for a cost-cutting measure.

Recently, a German law firm showed me a smart contract generator tool. The software asks you questions, asks you to provide information and data and then after 50 questions, you have a fully fledged procurement contract. It’s such an easy approach because a company that develops tech software for lay people came up with this idea and they just transferred this approach, a way of guiding a lay person through legally relevant stuff to create the output, which then is a contract. I see various applications for that, for simple contracts that are really standardised, like non-disclosure agreements, a simple lease agreement, a simple purchase agreement, or a simple labour contract. It can be used for any contract that a company uses on a repetitive basis. So it could be for one company’s licensing agreement, it could be for another company purchasing raw materials, it could be for another company purchasing professional services. Whatever the contract, on a repetitive basis, from Monday through Friday, it can be easily standardised and then created by clicking the mouse, rather than typing letters and numbers for hours, creating and drafting a contract.

Another area is copying what service providers have created for end users. For example, one telecommunications company in Germany created an application that you can use if you’re suffering from problems in your WiFi at home. Rather than calling a service line and waiting for 30 minutes hearing lousy music, the app connects to your WiFi router and does some things in the background and tests the connection without you seeing it. If the app (that you can use on your smartphone) detects a problem, it guides you through solving the problem. You don’t have to waste your time on a service line, you’re not wasting money on that call, and you get a quick solution. Something like that could also be used for standard legal questions in a big company that the business asks again and again and again. You just feed the software with information that only a lawyer can give, the software works by itself, the business is supported and they don’t have to phone up the lawyer.

The magic pill that I would like to find, and then eat and swallow, is a software application that we feed with the terms and conditions of our contracts. Based on our project execution experience, the software tells me which are the hot clauses and the cold clauses and, on the hot clauses, what different clauses we have used and how we can improve those hot clauses by learning from our own contracts around the globe. I think we can greatly improve knowledge management when it comes to our own contract execution around the globe.

2030 vision

I was reading the other day that, according to one global consulting firm, 85% of the jobs that people will have in 2030 don’t exist today – which is quite frightening, because it means that only 15% of today’s jobs will survive to 2030. But I would not say that 85% of what I’m doing with my legal team will no longer be done by us in 2030; I see different angles.

There’s one angle where I have the private citizen in mind, and yes I think there will be a huge disruption of how people like you and I, in our private lives, use legal services. I think if you look at the available tools already now, there will be less and less need to engage a lawyer to help you resolve your legal questions and legal disputes.

For companies, by 2030, if they are smart, they will have smaller legal teams but still continue to insource legal services, so they will use less and less external legal advice. I would say that smart in-house legal teams will have managed to develop in-house legal expertise and knowledge in areas where they are no longer dependent on external lawyers, and they can only do that because they are no longer wasting their time and energy on low-skilled, legal administration work. I think it will help the smart in-house legal teams to improve legal quality in areas where they are currently dependent on external experts, so I think it will be tight for external lawyers rather than for in-house lawyers, because there will simply be a decrease in engaging external lawyers.

But not for the real global law firms who make a fortune from global transactions where you need so much more brains and hands than a mid-size law firm can possibly get together. For mid-size law firms, it will be tough moving forward into the future, and you see it already – there’s a big trend of consolidation in mid-sized law firms. I would say that the landscape of law firms will look very different in 2030.

It was acceptable in the 80s

We are quite a conservative profession, at least in Germany, and we are under immense pressure to stop conserving the way we work rather than opening ourselves up to new ways of working. The days where a partner or an associate in a law firm can shift all technical stuff – word processing, Excel, PowerPoint – to an administrator are over with and, sooner or later, there will not be a person who does all that for you and you charge it to your client. I think we all need to step up our technical skills and internet skills and software skills, because our way of working as lawyers, and in-house lawyers, is pretty much the same as in the 1980s –and I don’t think that that’s sustainable.

The proliferation of blockchain technology has forced nearly every sector to re-examine traditional ways of doing business. Nowhere is the potential more apparent, or the sector more traditional, than in the negotiation, creation and execution of contracts. If the blockchain evangelists are to be believed, the manner in which parties’ contract will be changing drastically in the not-too-distant future. But while a number of high-profile success stories illustrate the transformation potential of the technology, it’s clear that there is still a way to go.

Blockchain understood

To understand blockchain technology and the potential value that it brings to business, think of how an ordinary business transaction works: there is an agreement and exchange of goods or services between parties. Each party keeps their own ledger, which records the transaction. But because the ledgers are held independently, there is scope for discrepancy between them – be it through error, disagreement or fraud. Traditionally, this was mitigated by introducing a third party to the transaction – usually a bank. But reliance on a third party introduces cost and inefficiencies that need not be there if there was a way to create and maintain a singular, shared ledger – one that is equal parts transparent and secure.

Enter blockchain

A blockchain is a series of mathematical structures, inside which individual transactions are recorded. The record of each transaction – each ‘block’ – is mathematically contingent on the block that came before it. The transaction becomes a permanent part of the history of the blockchain and, in that way, it cannot be tampered with: once it is added to the blockchain, all subsequent transactions are recorded in relation to that block and all of the blocks that came before it. Following each transaction, the updated blockchain is distributed to each participant. In this way, blockchain becomes a decentralised ledger that is impossible to tamper with effectively: any attempt to change a record in the blockchain will put it at odds with the version held by every other participant in the blockchain, as well as all of the subsequent transactions that have been recorded.

Put simply, blockchain technology allows for a distributed, decentralised and secure ledger that eliminates the need for third parties, while providing a level of validity to participants that would otherwise have been impossible. It is this technology that has made cryptocurrency like Bitcoin a viable endeavour. But the applications of blockchain are far more varied.

Smart contracts

Smart contracts are one such innovation made possible by blockchain technology – though as a concept, smart contracts have existed since the early 90s. The idea is that instead of a paper contract – one that amounts to the words on a page and the interpretation that third parties give them – one could record a contract in the form of computer code. The code not only provides for the terms of the agreement, but the execution of it as well. When the obligations of one party are satisfied, the platform behind the contract will automatically release the benefit owed by the other party.

The key to smart contracts is decentralisation – there are no banks or other third parties involved in the execution of the agreement. The idea is to allow the creation and execution of a contract between two people to be as simple and direct as possible.

The obvious question follows: where is the smart contract actually stored and how can it be possibly be trusted?

Blockchain technology is the solution. The decentralised, theoretically uncompromisable central ledger makes for a perfect arbiter for the integrity of these agreements. Once coded, the smart contract is added to the blockchain ledger, with its integrity provided for in the same way as anything else on the blockchain. If the transaction calls for it, the money at stake can be paid by each party into the smart contract using cryptocurrency, at which point the contract will hold the money in escrow until the necessary conditions are satisfied.

In theory, removing the element of trust between parties to a contract should make for more reliability.

‘What we have realised is that smart contracts are rapidly becoming an alternative way to transact, with more than $10bn raised through smart contracts in the last 18 months,’ says Olga V. Mack, vice president of strategy at Quantstamp, a company working to build security infrastructure for blockchain-based smart contracts.

‘What we have also noticed is the rapid proliferation of this technology. The widely cited figure is that, globally, there were more than 500,000 smart contracts that existed one year ago. That number has grown to about five million that exist today. The use of smart contracts has been growing exponentially and is showing no sign of slowing down.’

Smart and secure

The trepidation surrounding blockchain and smart contracts is by no means limited to those that don’t understand it. Plenty of ardent advocates for the widespread adoption of this technology acknowledge that, like most innovations, users should exercise caution against overreliance.

The execution of the agreement is where the real value of smart contracts is realised, but the process of negotiating, agreeing and coding the contracts themselves necessarily requires a human element. As such, it is subject to the same kinds of vulnerabilities as virtually anything else. There have been a number of high-profile breaches and hacks brought about by improperly coded smart contracts that have resulted in the losses of millions of dollars. Because the process is decentralised, and the money is wrapped up in the contract itself, the normal process of testing, reporting on and fixing erroneous lines of code will not suffice. Smart contracts need to be airtight from day one.

The DAO is a smart contract protocol. By June 2016, over $250m worth of cryptocurrency had been invested in the DAO by nearly 20,000 individuals. On 17 June, a vulnerability in the core code of the protocol was exploited and used to drain over $50m in virtual currency.

Vulnerabilities in code are nothing new – even the most diligent traditional financial institutions commissioning software intended to govern staggering numbers of monetary transactions will not expect their code to be free of bugs or vulnerabilities. The potential for catastrophe should these vulnerabilities be exploited is limited: as soon as they are identified, they can be corrected and updated. But because smart contracts rely on the ever-present and immutable blockchain ledger, once a smart contract is let loose into the world, changing it becomes difficult, if not impossible.

This question has led to a burgeoning economy of auditors whose speciality is to review smart contract protocols in order to expose vulnerabilities. This isn’t perfect for the same reasons that any piece of code isn’t completely unexploitable, but the extra step of third-party verification may go a long way in making sure that would-be investors or end-users are confident.

Taking Blockchain In-House

Before taking on her new role as vice president of strategy at Quantstamp, Mack spent nearly a decade working as an in-house counsel, putting her in the unique position of being able to consider the impact of blockchain technology for corporate legal departments.

‘I think at a high level, the opportunity is not all that dissimilar from electronic signatures. I think it will free GCs to be more creative and more impactful on the business side. Smart contracts will be another tool at the disposal of the modern GC, but we’re probably not quite there yet – the infrastructure and platforms are being built as we speak,’ she says.

‘Once we figure out the platform protocol and infrastructure challenges, I would expect at that point the proliferation of applications to take place. It’s good for lawyers to get into this now, both to understand and frankly to help build it – so they are part of building applications as opposed to suffering the results of misinformed others building it.’

‘It’s certainly a revolution. But so far the most impressive applications I have seen are outside the legal world,’ adds Vincent Martinaud, counsel and legal manager at IBM. ‘The most advanced are in trade finance (we.trade consortium), global logistics (the cooperation with Maersk) and in the food ecosystem (Carrefour being the last eminent player joining Walmart, Nestlé and Unilever amongst others), and all these initiatives are underpinned by blockchain technology.’

The Maersk example that Martinaud refers to is TradeLens, the blockchain platform born out of a partnership between global shipping company Maersk and IBM. The aim is to bring the global supply chain into the future by using blockchain and smart contracts to enable smarter collaboration between importers, exporters, customs agencies and other governmental bodies to make international shipping a smoother process without compromising on auditability and security.

‘In the legal field, I don’t think there is anything comparable yet. I’m not saying smart contracts aren’t used or going to be used, but at this moment in time the technology is not as pervasive as in other, more mature sectors.’

It is not hard to imagine the potential uses of blockchain within the legal sphere: anything which relies on record-keeping between multiple parties could find value in the technology. Land registries, particularly in developing countries where record-keeping is beleaguered by inaccuracy and corruption, could be revolutionised, as could intellectual property registers around the world.

That blockchain technology hasn’t become a staple of the in-house toolkit makes sense: the broader business world is still working to realise its potential. It’s also a highly technical and often misunderstood area: while lawyers are used to quickly digesting and using foreign pieces of information, this is a different beast entirely.

As these innovations become increasingly common within business, lawyers will not only have to begin thinking about how they can be leveraged for use on their own in-house teams, but how they can put themselves in a position to give legal advice in a post-blockchain world.

This may not be a perfect fit for a profession that has long been accused of technological aversion.

Blockchain is a field where the two worlds of software development and legal expertise meet. As the applications of blockchain and smart contracts move towards the legal realm, the pressure is on for lawyers to grow their understanding of a field typically left to the CIO.

Gloria Sánchez Soriano, group vice president and head of transformation, legal at Santander, has considered how disruption of this kind might impact the kinds of lawyers that can thrive in in-house teams.

‘Lawyers, and the people we will be hiring in the future must be able to provide legal advice to innovative projects. If you don’t understand blockchain, it will be very difficult for you to provide advice on this. And we are also considering all this in our training programmes at the Santander Legal Academy,’ she says.

‘Santander has a department which is in charge of the legal advice of our innovation areas, but there are also many other areas – for example, corporate investment banking – which have just done a blockchain project with a very technological base, so the lawyers who were traditionally advising these businesses now need to be able to advise about technological issues.’

There is an appreciation among lawyers interviewed and surveyed for this report that while this technology will be important going forward, lawyers are currently not equipped to deal with the change. Just 14% of those surveyed felt that current lawyers were adequately equipped to deal with technological changes within their profession. 61% felt that they were not.

Ready or not, change is coming, but these changes don’t spell doom for the legal profession: they simply mean that there will need to be an adaptation.

‘I do think that it will transform the expectation of competency for lawyers. In doing so, I also ultimately think it will make our jobs more exciting so that we don’t have to do all those administrative things that can be minimised and we can really drive volume- and quality- generating for our businesses,’ says Mack.

‘I think the next 10-20 years will be an exciting time to practice law. We will have an impact, we will be true partners to other business units. There is an increasing trend for legal to be a partner, to be volume and quality generating and to measure all of that. I think this is a technology that will help us to get there sooner and will help legal to become embedded and solidify the support of any business.’

Trepidation and regulation

While businesses marvel at the potential of blockchain, governments around the world are fighting their own battles with the technology. With the potential of blockchain to have a major impact on many highly regulated areas of business, it is inevitable that a regulatory response is coming.

The philosophy at the foundation of blockchain already sits uneasily alongside current regulatory and governmental structures: for instance, the EU’s General Data Protection Regulation (GDPR) dictates that individuals be able to request for their personal information to be deleted by those that hold it, yet the biggest draw of blockchain is the permanence of its record.

The anonymity that blockchain provides for cryptocurrencies also lends itself to use in more illegitimate endeavours. Tax evasion is a concern. Because cryptocurrency transactions are not easily attributable to individuals (if at all, depending on the currency being used) it makes it difficult for tax authorities to detect the lost tax revenue and punish those involved.

Then there’s the hard kind of criminality – money laundering, terrorist financing and drug dealing. For these, the EU has already taken steps to include cryptocurrency in the existing regulatory framework. The latest iteration of the EU’s Anti-Money Laundering Directive (AMLD5) brought cryptocurrency exchanges and certain e-wallet providers within the scope of the regulation. It would put these entities in the same position as traditional firms when it comes to their obligations to implement preventative measures and report suspicious activity relating to money laundering. The new directive entered into force in July 2018, meaning that EU member states will be required to comply by 10 January 2020.

The AMLD5 is not comprehensive, and certain corners of the cryptocurrency world are not covered, including certain wallet providers and independent trading platforms. Also, being an EU creation, it is only applicable to EU member states. As adoption of this technology grows, the need for global collaboration will increase, given its borderless nature.

Other jurisdictions have taken a more suspicious view of the technology. China banned cryptocurrency entirely in 2017. In the same year, South Korea banned initial coin offerings and interested parties are now eagerly waiting to see how the government proceeds from here. Japan was one of the first countries to recognise Bitcoin as a currency, though regulators have been silent on other blockchain-backed innovations.

The tension at the heart of proposed cryptocurrency regulation is an old one. With convenience and efficiency at the core of the blockchain and smart contract value proposition, the inevitable attempt by world tax authorities to take their cut of these transactions may hinder the core draw of the technology. On the other side of the coin, is there really any need for complete anonymity when it comes to financial transactions? This tension will inevitably shape the approaches to regulation of blockchain technology and, ultimately, play a major role in uptake – both for in-house purposes and beyond.

People tend to see technology as something that will allow them to get rid of the parts of their job that they don’t like – that they find repetitive, cumbersome or boring. Equally, it’s seen as something which will allow more efficiency and allow the opportunity to concentrate on the interesting parts of their job. In the past, this might have meant something as simple as word processors or automation. But now, all of a sudden, a computer can not only automate, but a computer can learn. That means you can start giving the computer a number of cases, and it starts building rules and logic on its own. Not exactly on its own – of course you need an algorithm that allows it to learn – but after a while, it learns. It can recognise different things, something in a picture or certain clauses in a contract – as soon as you provide it with enough data for the computer to learn, there are seemingly few limits on what could be achieved.

A new paradigm

This is a totally different paradigm. We are not talking about automation anymore, we are talking about something that can learn and, in many cases, can learn in a much more efficient way than a human. That changes the question, and this is something that most people have not yet realised.

Google, right now, is using machine learning and artificial intelligence to manage all the electricity consumption at its data centres. You might say, ‘This is Google, Google is not a regular company, they are on the cutting edge,’ but this is happening in more and more places.

It’s being used right now to identify tumours in medical imaging. Consider this: when a physician is looking for tumours manually, they can be given hundreds of images to search through – even though it’s a relatively routine task, the volume means that things can be inadvertently missed. So instead, an algorithm is being used to do it, and it’s already learnt to spot tumours better than physicians.

Eliminating uncertainty

I think a difficulty with technology is that when people don’t understand how it works, it can be disconcerting. But if people can develop a sense of what’s going on and understand the basics of how these things work, then it’s going to help with uptake and use. You don’t need to be a mathematician. If you follow the concepts of what it is – even in a nutshell, without getting into the nitty gritty details – you realise that machines don’t make mistakes. They don’t miss things. And things that are absolutely normal in humans don’t happen in machines: their perception is better, their senses are not relative, and they don’t get distracted.

The first time you jump into an autonomous vehicle, for instance, you keep thinking, ‘Well I’m not sure if the camera is going to see that, or the light, the reflection, the speed of reaction.’ And then you realise: no. As soon as you put the machine in charge of it, the machine is able to see 360°, they have immediate reactions, they don’t get distracted, they don’t look at their cell phones, they don’t get road rage.

Data analytics

Analytics is really exciting. I’m still amazed by what you can do already – understanding what your customers do, or think, or express. We have a crazy amount of customer interaction points – it’s not just that someone goes to a store and buys something or receives a service or a product. Now customers speak up on social networks, they provide opinions, they complain, they sometimes praise our products or what we do. So we have a crazy amount of moments that can be analysed. Right now, an algorithm can understand irony – when you tweet something that’s ironic, there are algorithms that can start to approximate and understand that it’s not really a compliment, it’s more like a complaint. Right now this is being deployed primarily in marketing – but there are a host of potential applications for this type of technology.

In my role, I’m extremely interested in how lawyers adopt innovation, because some time ago, lawyers used to be very traditional: they were kind of laggards.

In some places, we’re seeing that lawyers are using machine learning when examining contracts – instead of examining contracts one by one, every single clause, which used to be done by a lawyer, now it’s being done by an algorithm, because the legal terms and the legal language tends to be very well defined because it’s specifically written to avoid ambiguity.

As a lawyer, you used to trust your paralegal to go through the databases and find the relevant cases related to the one at hand. Now, lawyers have started to trust an algorithm to revise old cases and precedents and so on. They trust them much better than they trust human paralegals, because they realise that they can compare the text word by word, meaning that they don’t miss details. They can even revise all the cases heard by a particular judge and get to know about the biases of that judge in similar cases – which is something that a human assistant might not be able to do, or that might be able to do only by intuition.

I’ve been working with the Spanish Ministry of Justice in connection with the modernisation of justice in Spain. I also teach law students at IE. These two roles expose me a little bit to the realities of justice. Work is being done on ‘algorithmic justice’ for petty thefts and things that are repetitive – the possibility of being able to come up with a first verdict, of course allowing the two parties to appeal if they don’t agree with the verdict, but releasing many human hours that could add value in more complex cases. All the things related to an insurance claim, traffic problems when there’s no victims, etc. All these could be very well examined right now, with the current state of technology, by algorithms. You could ask one insurance company to negotiate with the algorithm of the other and get into an agreement, only bringing the human lawyers in if they are really required. That could take away a significant part of the burden for lawyers right now.

Behind the magic curtain

I think the key aspect here is to get people to see this as a natural thing, as something that should not get them scared. Google understood a while ago that machine learning was going to be fundamental. Three years ago, their CEO, Sundar Pichai, talked about machine learning as something that will change the world to the same amount and the same intensity as electricity or fire changed the world. This is a lot to say. So, how do you go from understanding that to getting your organisation to understand that? He put together a very ambitious programme to teach it to all the staff. And all the staff means all the staff – the clerical staff, the people that work in search, the people that work in every single part of the value chain in the company. What happened? Innovation flows much better when people are able to see machine learning not as magic, not as something that someone with a magic wand goes ‘Ping!’ and it starts working, but as something that flows from the data.

You start to work in a different way when you understand the importance of data in what we do on a regular basis. In our day-to-day issues, we don’t pay much attention to storing the data in a proper way and being respectful to how this data is being stored. As soon as you start creating a conscience about data and storing it the proper way – because later on it will provide us with a lot of value add, because you’re going to analyse with algorithms – you’re going to be able to go and find patterns. This is important because then things change in a corporation.

But most corporations are not doing that. Most companies are just using this idea of innovation, machine learning, coming up with algorithms etc, in just one aspect of their corporation – the innovation department or the machine learning department, or something like that. When you only do that, it is much more difficult to change an organisation.

Environmental factors

I think it’s better when a law professional is adapted to the environment. The environment is becoming influenced by technology all the time now – we do many things with technology that we didn’t used to do three years ago, and it’s changing amazingly fast. The legal profession has to relate to that and has to adapt to that. It brings up new opportunities: what happens if there’s a misunderstanding when I talk to my voice-enabled home assistant – what type of legal issues are there? And besides understanding these new cases, they need to understand how this is influencing the way they work, or the way they provide their services.

All of us will be able to talk to machines – most likely, kids will start programming in kindergarten. So what happens when these kids grow up and some of them become lawyers? They will be checking out an algorithm and understanding what the algorithm is doing, even creating their own algorithms. Right now, if you think about the latest version of iOS, it provides you with the possibility to tell Siri: ‘When I use this word or this command I want you to do this, this, this and that. I want you to open my GPS, and give me the directions to my office because I want to see where the traffic jam is, and then play this on Spotify…’ – and you can activate all that with a single voice command. What are we doing? We are creating algorithms.

The pressure on general counsel to innovate could be having a trickle-down effect on the external legal advisers they instruct.

The overwhelming majority – 91% – of in-house counsel surveyed for this report felt that it was important that their external advisers kept abreast of new technologies.

‘It is absolutely essential,’ says Gábor Kukovecz, head of legal and operations at Diageo. ‘The baseline is that we must be able to communicate very effectively with our external law firms. This requires that they use state-of-the-art communication and cloud-based collaboration software. In the near future, we will implement a collaboration software in which we work together with our external law firms that they must also fully implement.’

How important is it that your external law firms keep abreast of new technologies?

Despite there being a common recognition that it is an important factor, nearly as many in-house counsel reported that they didn’t know if their external providers were implementing technology to deliver their legal solutions (36%) as those that answered that they were (40%). Just 37% felt satisfied with the use of technology by external firms; 25% were not satisfied, and 38% were unsure.

As the conversation around alternative fee structures and the traditional firm-client relationship continues, many in-house counsel made the point that there is no reason that their efforts to reduce costs and increase efficiency via technology shouldn’t be replicated by their external counterparts. After all, in a number of ways, the GC is to the law firm as the business is to the GC – which is to say, the GC is the client and it should be incumbent on the firm to provide the best value for money.

‘Clients are no longer willing to pay for high numbers of billable hours when they are aware that many tasks can be done faster and cheaper,’ opined Tobiasz Adam Kowalczyk, head of legal at Volkswagen Poznan.

Are you satisfied with the use of technology by your external law firms?

‘Paralegals and associates who once devoted hours for document review can be now easily replaced by e-discovery processes. In a constant pursuit for efficiency and optimisation, clients expect more for less, which has made the legal market even more competitive. Fresh players have entered the market, providing clients with automated and cost-cutting solutions. I see automation as the way forward, making projects smarter and more efficient. Legal automation won’t be un-invented, and – eagerly or not – more and more firms will need to adopt it out of necessity.’

There are also rewards to be reaped in terms of collaboration. The initiatives taken by external firms can serve as a useful model for in-house teams trying to create efficiencies of their own.

‘External firms must have technological systems updated in order to provide us with the most modern solution and to share it with our internal legal team,’ said Ana Soriano, head legal counsel at Inveravante.

Not everyone is as bullish on technology, however. To some, the use of technology is mostly smoke compared to other, softer competencies.

‘The improvement I actually want from law firms is not based in technology,’ said Ruth Pearson, general counsel of LendInvest. ‘I’d be far more inclined to instruct a firm that could demonstrate an investment in understanding their clients – for example, by hiring non-lawyers to improve their commercial acumen and understanding of what drives their clients, moving away from billable hours to a client-focused incentive structure, understanding risk appetite and being able to advise within those parameters, than a firm that thinks it can demonstrate technological innovation.’

‘I prefer a good lawyer not using tech to a bad lawyer using tech,’ stated the general counsel of one large French manufacturing company.

When asked if the question of technology arises when undertaking a panel review of external advisers, just 35% said that it was a factor, while the majority (41%) said it wasn’t a factor at all. With panels becoming narrower and more deliberate all the time, the points on which firms differentiate themselves will take on an increasing importance. Given GC’s evident interest in the use of technology by external firms, this factor may grow in significance in the near future.

‘Depending on the jurisdiction and the business activity being undertaken, it is of moderate importance,’ said the group counsel of one global engineering company. ‘However, in the selection of lead counsel for C-suite-led matters, it has moved to the forefront of selection criteria.’

When I came to Volkswagen two years ago, I started auditing how we were handling cases and legal topics in our organisation, and I learned that in this field we were taking a bit of a classical approach. We didn’t really have a system in place that could embrace all of the legal queries, legal contracts, and everything else which comprised the work of the legal department. My impression is that while a lot of lawyers use new technologies and devices, we often do so in a way that replaces the old functionality without truly embracing the power of technology.

A one-stop shop

I proposed that we should implement a legal management system so that we would have all of the data – contracts, agreements and everything else you can imagine – connected to legal services and outcomes in a single system. Each employee in the company has access to the system and can submit legal queries. As an administrator of this system, I can delegate specific tasks to a lawyer in my team. But what is important is that the internal clients submit all the necessary data into the system so we don’t lose time calling each other or sending emails – everything is there in the system so we can render the legal advice. The same happens with the legal opinions, legal questions – internal clients can submit a query, and then I seek the right person in my team to respond. We have different response times based on the urgency of the query. You can access the system from any place – it’s online in the cloud, so my team can work from home or while travelling on business.

At the moment, the system is a database, but we are working with a legal tech start-up to test the addition of artificial intelligence solutions in a specific module that will create agreements for our internal clients. There will be no lawyer needed: you will just submit all the necessary data and the algorithm will prepare the agreement for you. We think this will streamline the process.

Benchmarking

Our system gives an opportunity to benchmark the work of my lawyers – how much time they need to respond, and how many queries they receive – you can extract this data from the system. I even have statistics. It helps to have an overview of the workload of the lawyers, so I can see how many cases they are dealing with and their response times. It also gives me a nice view of what issues are particularly complicated, and which we find time-consuming.

The lawyers in my team are very supportive of the system. Even those with less of a technical acumen are gradually adapting to this technical revolution, not to mention those who grew up in the digital age who adapt on the spot.

The costs of changing the paradigm

The challenge was to get the specific budget for the implementation. Convincing the management board was actually the first milestone for me – just to get the money and to convince the decision-makers that this was something we should do – because for them it’s also a change in the paradigm. We are quite a big organisation, with lots of departments and lots of different systems, and we wanted our system to be connected directly to our finance system so we could also track some standings and combine agreements with the invoices. The whole phase of implementation was quite troublesome, and it required cooperation with external IT advisers and our internal IT department, and a whole testing phase. We also had to provide training for the employees outside of legal, because previously it was easy for them – they were just grabbing a phone and calling a particular lawyer. Now they had to do it online without any support. So the beginnings were not easy, but now everyone has gotten used to it.

When thinking about technology, I tend to look for stuff from outside my company, to the people working in legal tech. I also try to be active in the legal tech space in Poland, and am vice chairman of the German-Polish Chamber of Commerce Legal Tech Commission. We meet every two or three months to discuss what’s going on in the legal market, and it’s very important for me to exchange opinions with my peers from other big corporations in Poland about how they use legal technologies to tackle problems, and what solutions they are using.

Getting ahead

Very often, if I’m writing a bid for legal services and want to cooperate with external counsel, I ask them if they are using any technological tools that can support me, or whether their legal advice can be rendered in a better structured way, or if there is the possibility that they will provide me with the necessary data direct into my system. For me, if a law firm could show that they have some legal tech solutions supporting their services, that would be an advantage.

I know that the big names are working on new technology, but my experience is that although it is cascading from the headquarters, there is not that much success in this field yet. I know that there are some Magic Circle firms that are even giving free office space for start-ups, and are creating and cooperating very closely. I think that this is happening in the Polish market, but it’s still not very common. It is a hot topic, everyone is talking about it, but then when you ask about the implementation, or what kind of tools people are using, it’s still at the early stage.

I believe that within the next two or three years we will see more technological disruption happening: more companies offering those services and more in-house counsel looking for those services on the market. It is growing and it will change the legal landscape. To be successful in the market, you have to be an early adopter, you have to be at the forefront, because otherwise you are just a follower.

We talk about external lawyers always being part of the project team. A very good example is due diligence when you are buying a property or making an acquisition. Now there are really good legal tech tools in place, which can analyse a lot of documents so that the lawyers can focus on giving more client-oriented advice. They can be closer to the client, and closer to their businesses rather than just sitting and analysing papers and, for me, that’s the biggest positive aspect of technological evolution and disruption.

Balancing the personal with the efficient

Some lawyers in my field have this feeling that we are losing the personal touch with our clients, and that we are just putting systems and technology in place. I think if you are working for a law firm, then that’s the most important thing – if I like a particular lawyer, I will work with them regardless of which firm they are working with because I know them, I know they’re a good professional and very responsive. But lawyers need to wear many hats – they need to be lawyers, they need to be project managers, very often they need to be psychologists and mediators, and this is the value that they add to the business. So if they can leave some of their work to algorithms and deal with the client instead – understand their business and their challenges – then that’s important, I think, from my perspective as GC.

In corporate legal departments, I think that technology can create an additional layer between the lawyer and the internal client. But I think our role is a little bit different: we are not looking for the client, clients are looking for us; we always have sufficient jobs to do. So from this perspective, I think it can optimise our work because then the internal client will think: ‘Do I really need to ask this question, maybe I can find it somewhere else, maybe they have a directory of frequently-asked-questions, maybe there are some common agreements which I can use and download from the system without contacting the lawyer.’ It’s easy to just take the phone and call a lawyer, but if you have to put some data in the system and think about it, then you might think, ‘Maybe it’s not a really big issue for me or maybe I don’t really need the legal support.’ In short, in internal legal departments, technology can help us to focus on where the real problems are, and devote our time to the legal issues which are really essential or which add value to the company.